Forex - Asia Close Highlights

 08:58 (GMT) 14 Nov

  [Forex Highlights]

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Asia Close Highlights (0100-TZJL-C01)

14 November 2017

Regional Backdrop:

Asian currencies were mixed once again. Most Asian equity markets fell today, as investors waited for more direction on central bank policy from speeches. KRW was up 0.24% more as a rebound trade, as with CNH rising 0.14%. This comes as Chinese 10Y yields breaks 4%, a first in three years. IDR gained 0.08%. In contrast, TWD (0.04%), PHP (0.03%), CNY (-0.01%), SGD (-0.03%) MYR (-0.04%) were more stable. INR was an underperformer (-0.1%), as CPI was higher than expected. THB also lost 0.07%.

USD/CNH moved lower during Asian hours, hitting a low of 6.6442 before rebounding to 6.6482 at last look. China data out last 24 hours confirms deleveraging in place, with slower money supply growth. Growth also slowing, with retail sales, fixed asset investment and industrial production coming lower than September numbers. PBOC fixed USD/CNY mid-point at 6.6399 vs. previous close of 6.6398. USD/CNY moved higher to 6.19 at last look. This is closing the CNY/CNH gap seen on Monday, partially (still 50pips). 1Y NDFs, however, coming off below 6.8000 handle following offshore spot trends, at 6.7973 last check.

USD/SGD saw overnight upside bias slowly faded away during the Asian session on Tuesday, as the pair edged down to trade around 1.3610. STI lost 0.52% as last sight.

USD/IDR onshore spot saw a firm opening at 13546 on Tuesday after last close at 13552 and slid lower to 13529 before a recovery to 13540+ again in the afternoon. A quiet US dollar as GBP weakness was countered by hopes of a US tax reform aided. Focus on the October trade data and Bank Indonesia decision this week, and we do not expect to see sharp moves ahead of that.

USD/INR onshore spot gapped lower to open at 65.3300 on Tuesday vs. last close of 65.4200 as October CPI rose to a 7-month high, dashing hopes of a Dec rate cut. Prices however rose to a 6-week high of 65.5325 in the afternoon before returning to 65.5000 subsequently.

Market Psychology:

USD/CNH- For USD/CNH and USD/CNY, we watch for more upward momentum to 6.6900 resistance level.

USD/SGD- Focus turns to the US inflation data in the near term and the progress on US tax reform. For USD/SGD, the pair remained well supported, eyes on the next resistance at 1.3660.

USD/IDR- Break of 13539 puts the focus on the upside, with next resistance now only at 13580. Strong support is only seen at 13460.

USD/INR- Break of 65.2000 puts the focus back on the upside, but a series of strong resistances ahead likely to cap below the 66 handle.

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