Forex - Asia Close Highlights

 08:46 (GMT) 15 Aug

  [Forex Highlights]

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Asia Close Highlights (0101-NHQC-C01)

15 August 2019

Regional Backdrop:

Majority of the Asian currencies were in the red on Thursday, as risk-off sentiments fostered due to global recession fears. PHP was the biggest loser down 0.46% against the greenback. JPY and THB were down 0.28% and 0.22% respectively. They were followed by IDR (-0.15%), MYR (-0.10%) and CNY (-0.07%). CNH was up 0.18% against the dollar and followed by SGD (0.09%) and TWD (0.06%). HKD was relatively stable. India and Korea's markets were closed due to market holidays.

USD/CNH has remained relatively horizontal moving, last with a modest offered tone at 7.0383. This is despite weak confidence triggering selloffs in US and Asia stock market indices. China has added some slight liquidity while keeping rates steady. This is hinting at a nuanced approach to economic stimulus. Home prices only increased by 0.59% m/m, indicating that property market is cooling in July. PBoC fixed mid-point at 7.0268 vs. previous close of 7.0250. This was near where we forecasted, indicating stability. USD/CNY last at 7.238 with a mild offered tone. 1Y NDF last at 7.0982.

USD/SGD printed a recent high at 1.3907, as risk-off sentiments grew after the Treasury bond markets sent a recession signal. However, pair pared gains during Thursday's Asian session and reversed to an intra-day low at 1.3868 during Thursday's Asian session. Singapore's Non-oil Domestic Exports (NODX) and electronics exports data are due on Friday, in which sharp contractions of -14.8% y/y and -34.4% y/y are expected respectively in July.

Rupiah initially weakened on weak sentiment, and that saw Bank Indonesia (BI) intervened in the market to ensure currency stability. Rupiah has rebounded slightly thereafter on Thursday. USD/IDR pushed to a high of 14333 before paring back gains to 14270 at last look. 1M NDFs retreated to 14350 at last look on Thursday.

India onshore markets closed for Independence Day on Thursday.

Market Psychology

USD/CNH - We focus on the 7.1000 psychological resistance level in case of any blow-up in US-China trade war. For USD/CNY, pair looks to close the gap with CNH and 7.0500 resistance is where we focus.

USD/SGD - Pair may break above the 1.3900 big figure again. If broken, will turn our attention to the 1.3915 resistance next.

USD/IDR - The pair is seen stuck in consolidation between 14170-14360, with upside guarded by BI intervention.

USD/INR - Bias for USD/INR towards upside, but consolidation between 70.44/71.40 more likely in the near-term.

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