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ASIA FX: USD/CNY Higher After LNY Break, Spot KRW & TWD Follow Firmer Yen

ASIA FX
BulletEM BulletAPACEmerging Market News

In North East Asia, FX trends have seen onshore USD/CNY spot re-open higher. The pair push above 7.2800 and hold above this level. Since Trump's inauguration highs in USD/CNY have been capped near 7.2900, so this will remain a near term upside focus point. The stronger USD/CNY open has helped bias USD/CNH higher, although this pair is only just back above 7.2900, so comfortably within recent ranges.  

  • The USD/CNY fixing was close to unchanged from pre LNY levels. The Caixin services PMI was weaker than forecast, continuing the soft run of PMI prints for Jan. The timing of LNY may be impacting, but China's growth challenges remain a focus point.
  • Local equities bounced at the open but this was short lived, while HK equities have also weakened in terms of the aggregate indices. The market is digesting where US-China relations stand. Late on Tuesday Trump stated a call with Xi will happen at the right time, but that there was no rush. Today the US Postal Service suspended inbound parcels from China and Hong Kong (see this BBG link for more details).
  • USD/KRW sits lower, last just under 1449, a won gain of close to 0.15%. Stronger yen gains, up almost 0.70, is providing an offset to KRW (against the weaker yuan levels). Earlier data on FX reserves and CPI hasn't shifted sentiment. The Kospi is up over 1.20%, so providing some support.
  • USD/TWD is back under 32.90, amid broader USD weakness (and catch up from Tuesday's session). Again, the local equity gains are likely helping at the margin. For spot USD/TWD, we are still above late Jan lows just under 32.70. 
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In North East Asia, FX trends have seen onshore USD/CNY spot re-open higher. The pair push above 7.2800 and hold above this level. Since Trump's inauguration highs in USD/CNY have been capped near 7.2900, so this will remain a near term upside focus point. The stronger USD/CNY open has helped bias USD/CNH higher, although this pair is only just back above 7.2900, so comfortably within recent ranges.  

  • The USD/CNY fixing was close to unchanged from pre LNY levels. The Caixin services PMI was weaker than forecast, continuing the soft run of PMI prints for Jan. The timing of LNY may be impacting, but China's growth challenges remain a focus point.
  • Local equities bounced at the open but this was short lived, while HK equities have also weakened in terms of the aggregate indices. The market is digesting where US-China relations stand. Late on Tuesday Trump stated a call with Xi will happen at the right time, but that there was no rush. Today the US Postal Service suspended inbound parcels from China and Hong Kong (see this BBG link for more details).
  • USD/KRW sits lower, last just under 1449, a won gain of close to 0.15%. Stronger yen gains, up almost 0.70, is providing an offset to KRW (against the weaker yuan levels). Earlier data on FX reserves and CPI hasn't shifted sentiment. The Kospi is up over 1.20%, so providing some support.
  • USD/TWD is back under 32.90, amid broader USD weakness (and catch up from Tuesday's session). Again, the local equity gains are likely helping at the margin. For spot USD/TWD, we are still above late Jan lows just under 32.70.