Forex - GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)...


 10:37 (GMT) 12 Sep

  [Forex Highlights]

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RECAP CURRENCIES, DATA AND EVENTS

Regional Backdrop:

Majority of the Asian currencies were in the green on Thursday, as risk-on sentiments gathered strength following Trump's decision to delay U.S. October tariffs on Chinese goods. TWD was the biggest winner, up 0.54% against the greenback. It is followed by INR (0.53%), IDR (0.51%), THB (0.49%), CNH (0.44%), CNY (0.42%), PHP (0.37%), SGD (0.34%), MYR (0.32%) and HKD (0.12%). JPY was the only loser, down 0.08% against the dollar. South Korea's markets are closed for market holiday and will reopen again next week.

Asia FX and News

+ China: China Is Considering U.S. Farm Imports as Goodwill Before Talks. -BBG

+ China: Trump Delays China Tariff Increase as Trade Talks Approach. -BBG

+ Indonesia: : SoftBank-backed ride hailer Grab is in talks to merge OVO, an Indonesian digital payments firm in which it owns shares, with an Ant Financial-backed local peer to build heft and power ahead of archrival Gojek, people familiar with the matter said. - JP

+ India: Expressing concerns over fall in export credit, Commerce and Industry Minister Piyush Goyal on Thursday said the government will soon come out with guidelines on extending foreign exchange credit to exporters at affordable rates. - ET

+ USD/CNH: USD/CNH dipped again after rebounding from a sharp fall during NY hours. Pair was last at 7.0812 after touching a 7.0874 low and rebounding to 7.0968 thereabouts. In the NY session, pair fell from 7.1100 big figure as Trump announced that the US will delay tariffs on China in October for two weeks. After breaking two technical support levels within the session, next support of 7.0765 will be keenly watched.

Europe FX and news

GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)... (0101-PFDN-C01)

+ The USD softened a little through a generally news light European morning, retracing some of its overnight gains against the JPY to fall back below 108 and extending the overnight losses against the EUR. Other currencies were little changed.

+ Data had little market impact. German and French final CPI were broadly in line with expectations. Eurozone industrial production was a little weaker than expected at -0.4% m/m, -2.0% y/y. Italian unemployment fell to 9.9% in Q2, the lowest since 2012. Swedish unemployment rose to 7.0% in August, equalling the highest rate for the year.

+ UK PM Johnson reacted to yesterday's Scottish court decision which ruled the proroguing of parliament was illegal, and the subsequent media coverage arguing that this implied he had lied to the Queen, by denying the accusations of lying.

Bonds and equities

EGBs consolidate ahead of the ECB, with a touch of follow through short covering early on that then fades. BTPs give a little ground through supply but fairly steady

US DATA

Weekly Jobless Claims and Aug's budget are due today

EMGE Flows

GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)... (0101-PFDN-C02)

The lira depreciated a bit at the beginning of Thursday's session, underperforming other EMEA currencies with the USD/TRY temporarily rising to 5.7688. The CBRT rate decision is due at 12:00 BST and we see the Bank lowering its policy rate further by 275 bps to 17.00%, in line with the Bloomberg consensus forecast and signaling that further rate cuts are likely. Because of worries about too aggressive rate cuts by the CBRT in the future and the risk of U.S. sanctions in response to Turkey's acquisition of the Russian S-400 missile system, we expect the lira to weaken further in the near term with the USD/TRY possibly breaching the key 5.80 resistance level.

GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)... (0101-PFDN-C03)

The ruble extended its gains at the beginning of Thursday's session, outperforming other EMEA currencies with the USD/RUB 64.956. The currency was driven by better global sentiment after U.S. President Donald Trump delayed the 5pp increase in tariffs on Chinese goods by two weeks and comments by head of the CBR's monetary policy department Alexei Zabotkin, who said that there was no reason to expect softer monetary policy by the Bank. But we still think that the ruble will suffer in the near term as we see the ECB easing monetary policy later today less than priced in by the market, with the USD/RUB approaching the 66.25 resistance level.


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