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USD Uptrend Persists


The continued pusher in US yields has aided the USD against the G10, while also weighing on equity risk appetite. This have been enough to keep USD/Asia pairs on the front foot, which are uniformly higher across the board today. The size of USD gains has been mixed, with the won being the weakest performer, along with MYR and THB. CNH and PHP have outperformed somewhat. Next week on Mon, China's 5yr and 1yr LPR rates are expected to remain unchanged. Taiwan export orders and Malaysian trade figures are also due, along with Indonesia's BoP.

  • USD/CNH got above 6.8900, but now sits back closer to 6.8850/60. Onshore equities are weaker, as the market keeps one eye on US-China relations. The CNY fixing isn't pushing back against the weaker yuan trend either yet. We had a big liquidity injection as well, as the authorities looked to keep the domestic system flush with cash. CNH has outperformed most of the G10 and some higher beta plays within the region.
  • 1 month USD/KRW got to a fresh high of 1302, which prompted the Finance Ministry to state won volatility was excessive and there was evidence of herd behaviour in FX markets. The pair is back to 1297/98 now. Such commentary won't change the won trend, but is something to be mindful of in terms of potential further jaw boning/intervention.
  • USD/SGD is back towards 1.3400 (+0.30%), although is still outperforming on a cross basis. The SGD NEER is drifting higher per Goldman Sachs estimates. Weaker export growth figures did little to weigh on sentiment, with the market likely awaiting next week's CPI data as the next guide post for the April MAS decision.
  • USD/THB got close to 34.60 post an unexpected Q4 GDP contraction. We now sit slightly lower, back to 34.50. Whilst the Q4 data is backward looking, it may leave sensitivity around baht levels higher, given weakness was reflected in exports for the final quarter last year.
  • Elsewhere, USD/MYR is back to 4.4300, levels last seen at the turn of the year. The pair is +0.60% higher for the session. USD/PHP remains around 55.25 currently, firmer for the session but sub yesterday's highs. Hawkish rhetoric from the BSP is likely helping at the margins.

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