Resilience In The Face Of Cross-Asset Headwinds

Asian FX has traded fairly resiliently despite cross asset headwinds (lower regional equities/firmer UST yields). Some NDF pairs have seen a noticeable recovery from closing NY levels, although INR and IDR remain underperformers. As we move into next week the focus is likely to rest with China LPR rates (no change expected), the first 20-days of trade data for South Korea, the BI decision (+25bps expected) and Singapore inflation.

• USD/CNH is down around 0.15% from opening levels, last tracking close to 6.9800. We did touch a low of 6.9658, but the pair quickly recovered. The fixing bias was close to neutral. The authorities expect growth to pick up further, while UBS cut this year's growth forecast but raised the 2023 outlook.
• 1 month USD/KRW is back to a 1308 handle, 0.75% sub NY closing levels (around 1318). This comes despite a weaker equity lead onshore, although offshore investors haven't sold local shares today.
• In Singapore November export data surprised on the downside. Exports fell -9.2% m/m (-2.0% forecast), while the y/y printed at -14.6% y/y (-6.5%) forecast. This suggests the best of SGD NEER gains are now behind us. USD/SGD is lower for the session, in line with weaker majors. The pair last at 1.3565, offers appear above 1.3600, while moves towards 1.3430/40 are drawing buying interest.
• The 1-month USD/PHP NDF has moved away from resistance at 56.00, last tracking just under 55.80. The 56.00 level has been a resistance point in recent weeks, while the past week has seen dips towards 55.50 supported. Below that is simple 200-day MA at 55.39. Earlier comments from the BSP Governor suggested the tightening cycle will extend into 2023.
• USD/INR is at multi week highs, last around the 82.80 level. INR continues to underperform. Recent record highs sit above 83.00 in the pair, so be mindful of intervention risks if we approach these levels.