Asia Open - Overnight Highlights
EMERGING ASIA
EM currencies perform mostly weaker against the USD as the greenback continue to receive haven bids on potential geopolitical tension flaring up. IDR saw the largest losses of 2.04%, followed by KRW 0.76%, TWD 0.34%, MYR 0.33%, PHP 0.31%, SGD 0.15%, INR 0.1%, CNH 0.07% and HKD 0.04%.
USD/CNH is trading higher at 7.2644 compared to the 7.2590 at previously closed. Onshore spot USD/CNY is trading lower at 7.2378 from 7.2381. 12 month NDF followed both the offshore market and is trading higher at 7.0696 compared to 7.0510 previously closed.
USD/IDR spot market is trading higher at 16175 from 15848 previously closed. 1 month NDF is trading higher at 16332 from 16117 previously closed.
USD/INR onshore spot market is trading higher at 83.53 from 83.45. 1 month NDF is trading higher at 83.71 from 83.58 previously closed.
NA Session
The USD saw little reaction to US data, a sharp 14.7% fall in housing starts and an as expected 0.4% rise in industrial production, with manufacturing stronger than expected with a 0.5% increase. Comments from Fed’s Jefferson, saying rates may have to stay higher for longer, did give the USD some support. However USD/JPY suddenly saw a sharp fall from near 154.75 to near 154, which appeared to reflect market nerves rather than actual intervention, and the plunge was subsequently reversed.
USD/CAD saw a bounce above 1.38 on Canadian CPI data that saw the BoC core rates fall, despite rising to 2.9% from 2.8% as expected overall. BoC Governor Macklem later stated inflation was heading in the right direction.
Macklem was speaking with Fed’s Powell, who stated that recent inflation data showed a lack of further progress and that if inflation persisted rates could remain at the current levels as long as needed. The USD bounced on the remarks, EUR/USD testing 1.06 and GBP/USD getting close to 1.24, though the response from USD/JPY was cautious. The USD bounce was quickly reversed, which appeared to be a response to the 2yr UST yield failing to hold a break above 5%. The USD ended mostly little changed, but sustained its gains versus the CAD.