USD Mostly Firmer, Better China Data Has Little Impact

The bias for most USD/Asia pairs has been higher, albeit within modest ranges. TWD and PHP have seen some outperformance though. The market tone appears more cautious ahead of tomorrow's Fed meeting, with month end also potentially playing a role. Better China PMI data was largely ignored by the market. Still to come is Taiwan export orders and Thailand trade figures. Tomorrow, South Korea Jan trade figures print, along with the Caixin manufacturing PMI in China. Manufacturing PMIs are due elsewhere in the region, along with the Indian budget.

• USD/CNH has tracked recent ranges, albeit with a positive bias. The pair currently sits just above 6.7600, slightly above NY closing levels. The CNY fix was close to neutral. The PMI prints point to an improving outlook, particularly in the services sector (see this link for more details).
• 1 month USD/KRW sits little changed for the session, last around 1230. Local equities are down 0.84% at this stage, while offshore investors have turned net sellers (-$122mn in net outflows so far). IP data for Dec was weaker than expected.
• TWD continued to see some outperformance. Spot USD/TWD couldn't hold a break sub 30.00, although the 1 month NDF is already comfortably below this level, last around 29.90. This pair found some support around early Dec lows sub 29.85. Also note this pair is close to forming a death cross forming (50-day MA breaking below the 200-day MA). The firmer TWD tone looks to be a little at odds with steady CNH and KRW levels today. However, it looks to be somewhat of a catch up play. The currency has lagged the stronger ADXY tone through January.
• In Singapore, the December unemployment rate printed at 2% in line with expectations. This is the lowest unemployment rate since early 2016. The SGD NEER (per Goldman Sachs estimates) is drifting higher post the unemployment rate print, albeit a touch off last week's high. We sit ~0.5% below the upper end of the band. USD/SGD is dealing marginally firmer today, up ~0.1% today, last printing at $1.3145. Technicals remain bearish for USD/SGD.
• USD/PHP has had a modest 20pip range (54.47/54.67) so far today, last sitting just near 54.51. Note the 20-day EMA comes in at 54.87, while recent lows sit just under 54.30. The slump in local equities, down 3.00% at this stage isn't impacting FX sentiment. Equities are tracking sharply lower into month end, as the index lost 1.15% yesterday. BSP expects Jan inflation (due next Tuesday) to print between 7.5%-8.3%.