Forex - Asia Close Highlights


 08:46 (GMT) 22 Aug

  [Forex Highlights]

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Asia Close Highlights (0101-NLNZ-C01)

22 August 2019

Regional Backdrop:

Most Asian currencies were slightly weaker on Thursday. The key focus will still be on Fed Chair Powell Speech's on Friday, which markets will scrutinize for clues of Fed's next policy move. Bank Indonesia (BI) announced a second consecutive cut of 25bps in its policy rate at the August meeting to lift GDP growth, IDR was in mild gains of 0.1% against the dollar. South Korean Won pared some earlier gains, and was down by 0.41% against USD. That was followed by CNH (-0.23%), CNY (-0.22%), INR (-0.20%) and SGD (-0.10%). Other currencies including PHP, HKD, THB, TWD and MYR were quite stable.

USD/CNH has continued on a bid tone since the NY session. This is despite Fed minutes arguing for aggressive easing. Pair was last up to as high as 7.845. PBoC fixed mid-point at 7.0490 vs. previous close of 7.0633. This still signalled at some support for currency despite higher than previous days. USD/CNY gapped higher and gradually rose, last at 7.758. 1Y NDF last at 7.1477.

USD/SGD rebounded from 1.3825 to print an intra-day high at 1.3861, before paring gains to 1.3848 towards the end of Thursday's Asian session. The release of the FOMC minutes was a non-event and reactions were relatively muted. Attention now shifts to Friday's Jackson Hole Symposium, where markets await further guidance from the Fed.

USD/IDR onshore spot remained close to the 14240 levels on Thursday after a drop earlier on Wednesday from 14270+ levels. Traders remained on the sidelines ahead of the BI decision and a surprise cut saw the pair drop to intraday lows of 14228 as prudent policy stance was ensured.

USD/INR onshore spot traded higher to 71.700 levels in early trading on Thursday from previous close of 71.560. The RBI minutes from the July meeting showed a dovish bent with Governor calling for further growth support. The 71.800 resistance was tested again in the afternoon but no break seen until last check. Focus is now on Fed Chair Powell's speech on Friday and the G7 meetings.

Market Psychology

USD/CNH - 7.1124 resistance is still far although possible to reach in the coming days. A move below 7.0411 support may result in some profit taking. Attention is now at psychological 7.1000 big figure resistance given recent trends.

USD/SGD - We expect pair to edge lower and eye the 1.3806 support next. If broken, will turn our attention to the 1.3795 support.

USD/IDR - Pair is unlikely to target the 14360 resistance but buyers below 14200 will likely keep the pair range bound.

USD/INR - Upside bias is likely to be intact, and expect a break of the 71.800 resistance to turn the focus to the 72 handle.


Forex - China Flows: CNH still looking to weaken, even as PBOC fixing signals at currency support


 02:18 (GMT) 22 Aug

 [Forex Flows] [Central Banks]

USD/CNH has continued on a bid tone since the NY session. This is despite Fed minutes arguing for aggressive easing. Pair was last up to 7.0729. 7.1124 resistance is still far although possible to reach in the coming days. A move below 7.0411 support may result in some profit taking.

PBoC fixed mid-point at 7.0490 vs. previous close of 7.0633. This still signalled at some support for currency despite higher than previous days. USD/CNY gapped higher and stayed elevated, last at 7.0673. Attention is now at psychological 7.1000 big figure resistance given recent trends. 1Y NDF last at 7.1396.


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