Forex - Asia Close Highlights

 08:46 (GMT) 19 Jun

  [Forex Highlights]

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Asia Close Highlights (0101-LWFP-C01)

19 June 2019

Regional Backdrop:

Asian currencies gained as trade optimism boosted risk sentiment on Wednesday. Trump's positive comments have rekindled some hope that trade war between the U.S. and China could abate as the two leaders meet next week at G20. KRW was biggest winner, up by 0.82% against the greenback. That was followed by TWD (+0.60%), THB (+0.38%), IDR (+0.37%), PHP (+0.2%) and MYR (+0.14%). Other currencies were quite stable.

USD/CNH saw slight reversion after a sharp move down in the NY session a day earlier. Pair consolidated around the 6.9000 handle then moved up around 50pips, last at 6.9062. Both U.S. and China have confirmed they are going to have a Trump-Xi meeting during G20 on June 28-29. Also policymakers from both sides are meeting before that. So that is helping market sentiment. PBoC fixed mid-point at 6.8893 vs. previous close of 6.9200. USD/CNY was last at 6.9049, lower than 6.9250 levels seen a day earlier. 1Y NDFs also came off to 6.9629 last.

USD/SGD fell to an intra-day low at 1.3660 at the beginning of Wednesday's Asian session, following the rekindling of the U.S. - China trade talks, which boosted the risk assets. Pair recovered subsequently to around 1.3680 and may eye the 1.3700 big figure next.

USD/IDR onshore spot gapped lower to open at 14263 on Wednesday after the overnight risk on created by dovish Draghi, and President Trump confirming a meeting with Chinese President Xi which has re-ignited hopes of a trade deal. Pair however traded sideways following the open as there were also some expectations for Bank Indonesia to ease policy rates this Thursday.

USD/INR onshore spot gapped lower to open at 69.5600 on Wednesday from previous close of 69.7000 amid a risk on tone created from dovish Draghi and trade optimism. Pair however could not break below the key 69.5000 in the morning, and returned to 69.70-levels at last look as higher oil prices underpinned.

Market Psychology

USD/CNH - 6.8646 is the support level to watch if there is further breakthrough in relations. We believe that USD/CNY should trade close to 6.9000 for the time being, pending further trade developments.

USD/SGD - If Fed does not exhibit any sign of dovishness, pair may break above the 1.3700 and eye the 1.3725 resistance next.

USD/IDR - Another move above 14300 is likely if Fed remains 'patient' or if BI turns dovish.

USD/INR - The 70 handle is still on threat, but expect to find sellers above that ahead of the July 5 Budget announcement. Risk to 69.5000 is seen if Fed turns dovish.

Forex - India Flows: Rupee slips further

 04:36 (GMT) 14 Jun

 [Forex Flows]

USD/INR onshore spot extends the rally on Thursday, rebounds from the dip following the higher open. Firmer oil prices amid geopolitical tension over tanker attack providing some support for the pair. Spot is inching towards the 69.670 resistance and a sustained move above latter will trigger gain to next target at 70.090. 1M NDFs continues to edge higher, seeking out Monday high at 69.90. SENSEX slips 0.32% thus far on Friday.

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