Forex - Asia Close Highlights

 08:44 (GMT) 12 Oct

  [Forex Highlights]

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Asia Close Highlights (0100-TCFZ-C01)

12 October 2017

Regional Backdrop:

Asian currencies gained on Wednesday, continuing a trend since the start of the week. Markets perceived Fed minutes as being dovish, and this helped to drag on the DXY. The outperformers were THB and MYR, up 0.23% and 0.21% respectively. Malaysia industrial production was strong, at 6.8% y/y from 6.1% a month ago. KRW was also seen gaining 0.18%. Chinese currencies were mixed, with CNY gaining 0.09% and CNH losing 0.05%. In contrast, PHP fell 0.14%. This comes as local news on oversubscription on term deposits, according to BSP Deputy Governor Guinigundo.

PBOC fixed USD/CNY mid-point at 6.5808 vs. previous close of 6.5882. This hinted at a preference for USD/CNY to move lower. The onshore pair took cues and fell to a low of 6.5860 before rebounding back up, and to 6.5839 at last look. 1Y NDFs meanwhile moved upwards on Thursday Asian morning hours but since faded and went back to 6.7312 at last check after opening at 6.7290.

After dipping to a new 2-week low of 1.3528 on Thursday morning, USD/SGD remained mostly stable thereafter, and traded on either side of 1.3540 for the day. Traders remain on the sidelines ahead of the country's Q3 GDP and MAS announcement on Friday. We expect it to retain its stance on the neutral appreciation of the Singapore dollar, with no change to the midpoint or the width of the slope.

USD/IDR onshore spot gapped lower to open at 13513 vs. last close of 13518 but was bid up above 13520 to a high of 13528 in early trading even as the USD index held onto its overnight losses from FOMC minutes. Downside pressures however returned and a momentary dip below 13500 was seen, and the pair could not get back above 13510 until last look.

USD/INR onshore spot gapped a shade lower to open at 65.1300 on Thursday vs. last close of 65.1400 and printed a fresh 1-week low of 65.0700 in early trading. A weak US dollar overnight from a dovish tint in FOMC minutes weighed, but the 65 handle failed to give in until last check.

Market Psychology

USD/CNY - In the light of dovish Fed minutes, momentum is on the upside for USD/CNY, with resistance level of 6.6000. Otherwise, we see some support at 6.5750.

USD/SGD - Eye on the support level at 1.3500 big figure.

USD/IDR - We continue to see gains above 13550 to attract offers and intervention fears, but resistance turned support at 13300 should continue to hold.

USD/INR - Even though increased spending continues to risk fiscal deficit target breach, we see no risk to the 66 handle.

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