USD Firmer In Asia

A firmer USD became apparent after a fairly non-committal start to Asia-Pac dealing, with the greenback moving to the top of the G10 FX table, although the DXY operates a little shy of its recent cycle peak.

• No doubt the early moves higher in USD/CNH (linked to soft Chinese PMI data, angst surrounding Sino-U.S. relations & COVID worry, as Beijing deepened COVID limitations, while the case situation improved in Shanghai) & USD/JPY have played into the broader USD uptick. Note that both crosses remain comfortably within the recently observed ranges, with USD/CNH last +400 pips or so, just above CNH6.6800, while USD/JPY is ~65 pips firmer on the day, hovering around Y130.35.
• More broadly, the likely 50bp hike from the Fed on Wednesday, coupled with global recession fears and the expectation for further Fed tightening is playing into the USD bid at the start of a new week.
• Broader liquidity has been limited by holidays in Hong Kong, Singapore & China, while the observance of a holiday in London will hamper liquidity during European hours.
• Tier 1 headline flow has been relatively non-existent since the Asia open owing to widespread holidays across the region.
• The latest U.S. ISM manufacturing survey headlines the wider docket on Monday, with final Eurozone m’fing PMI data also due.