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Spot USD/CNY Drift Higher Continues, Mixed USD/Asia Trends Elsewhere

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USD/Asia pairs are mixed, albeit largely tracking recent ranges. Spot USD/CNY continues to firm, remaining close to the top end of the daily trading band. The WSJ is reporting that the US is drafting sanctions that could cut off some China banks from the global financial system in order to curb the country's commercial support for Russia's war with Ukraine. Elsewhere KRW and PHP are modestly firmer, while other pairs are close to flat. Tomorrow, we get South Korean consumer confidence, followed by the BI decision in Indonesia later on.

  • Spot USD/CNY has firmed towards 7.2450, while USD/CNH is also a little higher, last near 7.2575. Local equities are weaker, underperforming the broader trend of positive gains seen in the region. The CSI 300 is back near 3500. The WSJ article may be weighing on sentiment at the margins and comes ahead of US Secretary of State Blinken's trip to Beijing.
  • 1 month USD/KRW has tracked recent ranges, the pair last near 1376, slightly below NY closing levels from Monday. Equity sentiment has been flat today, modestly unperforming the better tech led trend see elsewhere.
  • Spot USD/HKD is back close to April highs. the pair last near 7.8365. Earlier April highs were just under 7.8390 (back on the 11th). This month has seen dips in the pair back under the 20-day EMA as buying opportunities. This support point is trending higher and last around 7.8310. Interestingly, there hasn't been much yield sponsorship on this recent rebound in spot USD/HKD. The US-HK 3 month rate differential sits off recent highs, last near +86bps. The divergence between the two series is modest, but most of the time we see both series moving in the same direction. On the data front, we have the March CPI out later. The market expects 2.1% y/y, unchanged from Feb. On Thursday we get March trade figures.
  • USD/IDR spot appears to be consolidating near recent highs the pair last near 16240, little changed for Tuesday so far. The 1 month NDF is near 16260, comfortably off recent highs, but also not showing signs of dramatic mean reversion. Note for this pair the 20-day EMA continues to trend higher and was last near 16071.5. Recent highs were marked at 16366. Near term focus rests with tomorrow's BI outcome. No change is expected by the consensus although several sell-side forecasters are expecting a 25bps hike to curb rupiah depreciation pressures.
  • Elsewhere, USD/INR sits slightly lower, last near 83.35. PMI prints for April (preliminary) were unchanged for manufacturing (59.1) and slightly higher for services (61.7). They continue to paint a growth outperformance picture from India.
  • Singapore CPI for March was weaker than expected, falling 0.1% m/m. This dragged the headline down to 2.7% from 3.4% prior and 3.1% forecast. USD/SGD sits a touch higher, last near 1.3625.
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USD/Asia pairs are mixed, albeit largely tracking recent ranges. Spot USD/CNY continues to firm, remaining close to the top end of the daily trading band. The WSJ is reporting that the US is drafting sanctions that could cut off some China banks from the global financial system in order to curb the country's commercial support for Russia's war with Ukraine. Elsewhere KRW and PHP are modestly firmer, while other pairs are close to flat. Tomorrow, we get South Korean consumer confidence, followed by the BI decision in Indonesia later on.

  • Spot USD/CNY has firmed towards 7.2450, while USD/CNH is also a little higher, last near 7.2575. Local equities are weaker, underperforming the broader trend of positive gains seen in the region. The CSI 300 is back near 3500. The WSJ article may be weighing on sentiment at the margins and comes ahead of US Secretary of State Blinken's trip to Beijing.
  • 1 month USD/KRW has tracked recent ranges, the pair last near 1376, slightly below NY closing levels from Monday. Equity sentiment has been flat today, modestly unperforming the better tech led trend see elsewhere.
  • Spot USD/HKD is back close to April highs. the pair last near 7.8365. Earlier April highs were just under 7.8390 (back on the 11th). This month has seen dips in the pair back under the 20-day EMA as buying opportunities. This support point is trending higher and last around 7.8310. Interestingly, there hasn't been much yield sponsorship on this recent rebound in spot USD/HKD. The US-HK 3 month rate differential sits off recent highs, last near +86bps. The divergence between the two series is modest, but most of the time we see both series moving in the same direction. On the data front, we have the March CPI out later. The market expects 2.1% y/y, unchanged from Feb. On Thursday we get March trade figures.
  • USD/IDR spot appears to be consolidating near recent highs the pair last near 16240, little changed for Tuesday so far. The 1 month NDF is near 16260, comfortably off recent highs, but also not showing signs of dramatic mean reversion. Note for this pair the 20-day EMA continues to trend higher and was last near 16071.5. Recent highs were marked at 16366. Near term focus rests with tomorrow's BI outcome. No change is expected by the consensus although several sell-side forecasters are expecting a 25bps hike to curb rupiah depreciation pressures.
  • Elsewhere, USD/INR sits slightly lower, last near 83.35. PMI prints for April (preliminary) were unchanged for manufacturing (59.1) and slightly higher for services (61.7). They continue to paint a growth outperformance picture from India.
  • Singapore CPI for March was weaker than expected, falling 0.1% m/m. This dragged the headline down to 2.7% from 3.4% prior and 3.1% forecast. USD/SGD sits a touch higher, last near 1.3625.