February 06, 2023 05:47 GMT
USD/Asia Pairs Higher, But USD/CNH Finds Sellers Above 6.8000
Most USD/Asia pairs are higher, with weaker yen levels and lower equities weighing. USD/CNH saw a decent retrace lower though from earlier highs (from +6.8300 back to 6.78). Tomorrow, China FX reserves for Jan are out, along with Taiwan Jan trade figures. Philippines CPI figures are also out, along with IP figures for Malaysia.
- USD/CNH spiked above 6.8300 amid yen weakness and US-China tensions. This drew selling interest though, with the pair moving back towards the 6.7800 level. A stronger than expected CNY fixing helped, (the firmest relative to expectations since late Nov), while a Reuters story focused on more support measures for growth this year (although not a massive stimulus), likely helped at the margins. We are slightly higher now, last around 6.7900.
- 1 month USD/KRW has mostly traded with a positive bias. Dips towards 1242/43 have been supported, with the pair pushing towards 1250 this afternoon. Spot has already broken this level. Local equities are weaker, off 1.3%, while offshore investors have sold -$181.6mn of local equities so far today.
- Pressure continues on INR as broad-based USD strength continues to help USD/INR firm. The pair has opened dealing 82.40/50, dropping ~0.7% today. Last week through to Thursday Foreign Investors sold ~$1.4bn of Indian equities, as the Hindenburg report on Adani continued to weigh on domestic markets. USD/INR is now at its highest level since 10 Jan. The cross is dealing above all its key EMAs, bulls next target is 83 handle. Bears first look to sustain a break of 82 to turn the tide.
- Spot USD/IDR has gaped higher, up a little over 1% to 15050/55. This puts the pair back to mid-Jan levels. Note the 20-day EMA comes in just above 15100, while the 200-day is around the 15130 level. On the downside, recent lows come in closer to 14830. The 1-month NDF is back around 15075/80, with some resistance ahead of 15100, although an earlier move to 15050 saw some USD demand emerge. Q4 GDP came out slightly better than expected (5.01% y/y, versus 4.92% expected, 5.73% prior).
- USD/THB is the strongest gainer within the USD/Asia space so far today, with the pair up over 1.7%, last near 33.52. A large part of this reflects catch up to broader USD gains after onshore markets closed on Friday. Earlier highs for the pair came in close to 33.63. We are now back to early Jan levels. On the upside, the 34.00 level presents as a target, while the 50-day EMA also just comes in above this level. On the downside, note the 20-day EMA is around 33.15. On the data front, Jan CPI figures came in a touch below expectations. Headline at 5.02% y/y, versus 5.10% expected, while core was at 3.04% y/y, 3.10% forecast. The Commerce Ministry expects headline pressures to ease further in Feb (sub 5%), which would be consistent with the trend move lower since pressures peaked in August last year.