ASIA FX: Stronger Yen Doesn't Aid Region, IDR & THB Down For The Week
The bias around USD/Asia pairs is higher in the first part of Friday dealings. The firmer US yield backdrop from Thursday, most notably with the 10yr real yield moving back up to 1.73%, is supporting broader dollar sentiment. Regional equity sentiment is mixed, with aggregate shifts less than 1% at this stage. We did see some USD/Asia pairs pull back in line with USD/JPY (post the hawkish BoJ hold), but follow through has been limited.
- USD/CNH was last around 7.1100, against earlier highs of 7.1157. Focus is on the upcoming phone call between US President Trump and China President XI (scheduled for 9am ET US). It's expected to center around the future of Tiktok but the market will also be eyeing for any broader trade related sentiment that emerges from the call. Both onshore and offshore yuan spot sit up modestly for the week.
- USD/KRW is back at 1395 in latest dealings, up around 0.50% from end Thursday levels. This is quite the rebound given we got to 1375.65 on Wednesday. The pair hasn't been above 1400 so far in Sep. Dovish rhetoric from the BoK coupled with the US yield rebound have been won headwinds. For the week though we are little changed.
- TWD has done better than KRW amid the firmer global tech equity tone (which has helped keep inflows into local stocks firm). Spot USD/TWD was last near 30.135, still near week to date lows just under 30.00. TWD is up close to 0.30% so far this week, the best performer in EM Asia FX. As expected the CBC held steady on Thursday.
- THB sits off around 0.50% so far this week, the second worst performer in EM Asia FX (with IDR the worse). USD/THB was last around 31.85/90, just short of week to date highs (31.965). A short while ago a series of headlines crossed. The BoT noted it had acted on the baht and would continue to monitor it closely (looking to avoid excessive moves). It added that the baht was stronger than what was implied by underlying fundamentals but that it hadn't seen any unusual speculation (per RTRS). The central bank also reiterated that the baht had been discussed with the Thailand FinMin.
- USD/IDR is up close to 1.2% so far this week, as the pair consolidates its break above 16500, which puts us to fresh highs back to May of this year. BI's surprise rate cut shows a clear shift to drive growth, with financial stability now seemingly less important. The pair was last at 16565.
- Other pairs have seen little change over the past week, USD/PHP is holding above 57.00, but within recent ranges. USD/MYR is back above 4.2000, unable to sustain the recent break lower.
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OIL: US Inventory Data Help To Stabilise Crude
Crude has stabilised during today’s APAC session after falling over a percent on Tuesday. US industry data showing a crude inventory build has provided some support with WTI up 0.4% to $62.04/bbl (Oct contract) off its intraday low of $61.83. Brent is 0.3% higher at $66.00 after falling to $65.81. The USD index is up 0.1%.
- With OPEC steadily increasing its production targets and forecasts for a growing market surplus, supply trends are being monitored closely. CBA is forecasting Brent to fall to $63/bbl in Q4 2025 due to rising global inventories, according to Bloomberg.
- While a Ukraine deal is a long way off, progress increases expectations that eventually sanctions on Russia will be eased. A setback could see the recent sell off reverse.
- Bloomberg reported that there was a US crude inventory draw of 2.4mn barrels last week, more than offsetting last week’s 1.5mn build. Gasoline stocks fell 1mn barrels but distillate rose 500k, according to people familiar with the API data. The official EIA data is out today.
- Later the Fed’s Waller and Bostic appear and the July FOMC meeting minutes are published. Friday’s Chair Powell speech is likely the key event remaining this week.
- UK July CPI & PPI, euro area July CPI and German July PPI print. ECB President Lagarde appears on a panel.
LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
| Date | Time | Country | Event |
| 20-Aug | 0700 | DE | PPI |
| 20-Aug | 0810 | EU | ECB Lagarde at WEF Intl Business Council |
| 20-Aug | 1000 | EU | HICP (f) / Q2 Flash Vacancies / Labour Cost Index |
| 21-Aug | 0815 | FR | S&P Global Services / Manufacturing PMI (p) |
| 21-Aug | 0830 | DE | S&P Global Services / Manufacturing PMI (p) |
| 21-Aug | 0900 | EU | S&P Services / Manufacturing / Composite PMI (p) |
| 21-Aug | 1000 | EU | Construction Production |
| 21-Aug | 1500 | EU | Consumer Confidence Indicator (p) |
| 22-Aug | 0700 | DE | GDP (f) |
| 22-Aug | 0745 | FR | Manufacturing Sentiment |
| 22-Aug | 1000 | EU | Q2 Negotiated Wage Growth |
| 23-Aug | 1725 | EU | ECB Lagarde at Jackson Hole |
| 25-Aug | 0800 | ES | PPI |
| 25-Aug | 0900 | DE | IFO Business Climate Index |
| 25-Aug | 1400 | BE | BNB Business Confidence |
| 26-Aug | 0745 | FR | Consumer Sentiment |
| 27-Aug | 0700 | DE | GFK Consumer Climate |
BOBL TECHS: (U5) Trend Needle Points South
- RES 4: 117.710 High Aug 5 and a key resistance
- RES 3: 117.640 High Aug 7
- RES 2: 117.514 50-day EMA
- RES 1: 117.356 20-day EMA
- PRICE: 117.200 @ 06:00 BST Aug 20
- SUP 1: 116.950 Low Aug 15
- SUP 2: 116.840 1.00 proj of the Jun 13 - Jul 11 - 22 price swing
- SUP 3: 116.800 Low Mar 17 (cont)
- SUP 4: 116.637 76.4% retracement of the Mar 6 - Apr 7 bull leg (cont)
Despite the latest recovery, a bearish theme in Bobl futures remains intact. A strong sell-off on Aug 15 highlights a bearish threat, once again. The contract has pierced support at 116.970, the Jul 25 low and a bear trigger. A clear breach of this level would set the scene for an extension towards 116.849, a Fibonacci projection. Key short-term resistance to watch is 117.514, the 50-day EMA.
