Forex - Asia Close Highlights

 08:50 (GMT) 15 Oct

  [Forex Highlights]

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Asia Close Highlights (0101-PKVX-C01)

15 October 2019

Regional Backdrop:

The relief rally seen in Asian currencies proved to be short-lived. There have been report that China wanted more talks before accepting the Phase one deal, hence, further details regarding the U.S.-China trade were needed to sustain positive sentiment. Most currencies pared back earlier gains on Tuesday, with TWD down by 0.2% against greenback. That was followed by IDR (-0.18%), INR (-0.16%), PHP (-0.14%) and THB (-0.10%). Chinese onshore and offshore yuan were both down by 0.1% against the dollar, and earlier data showed that CPI edged higher to 3% y/y in September. HKD, KRW, SGD, MYR were relatively stable.

USD/CNH was range bound last at 7.0791. China inflation climbed 3% y/y in September, while PPI fell 1.2%. PBoC fixed mid-point at 7.0708 vs. previous close of 7.0670. USD/CNY moved horizontally, last at 7.0765. 1Y NDF last at 7.1406.

USD/SGD traded in a relatively tight range between 1.3684 and 1.3695 at the beginning of Tuesday's Asian session, before edging higher to around 1.3710 at the end of the session. Reports are saying that China are intending to seek more talks with U.S. before proceeding with phase one of the trade deal. This will likely cap recent risk-on sentiments and keep the 1.3625 support safe. The Monetary Authority of Singapore released plans on Tuesday to enhance Singapore's capital market ties with China.

USD/IDR onshore spot rebounded from the lows of 14113 seen on Monday and was seen back at 14140+ levels in early trading on Tuesday. Gains from US-China partial trade deal wore off as China demanded more details from the US. Trump's sanctions on Turkey and further HK worries also kept risk aversion alive, and pair was bid up to 14160-levels in the afternoon.

USD/INR onshore spot traded with a bid tone on Tuesday, inching up to near 1-month highs of 71.3550 at last check as September inflation data reported on Monday night threatened RBI's medium term target of 4%. This however may not deter the central bank from more rate cuts, although some cautiousness is warranted.

Market Psychology

USD/CNH - Support and resistance at 7.0303 and 7.1305 respectively. For USD/CNY, 7.0500 psychological support to hold unless of further US-China trade development news.

USD/SGD - Pair may see a corrective rebound towards the 1.3721 and 1.3780 resistance soon amid the waning risk-on sentiments.

USD/IDR - Moves towards 14200 will however see BI coming in the markets more actively, and room above remains rather limited.

USD/INR - Break above 71.500 is necessary to establish a firmer upside bias.

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