ASIA FX: USD/Asia Pairs Drift Higher, MYR Outperforms
USD/Asia pairs are either modestly higher, or flat for Tuesday trade. MYR is the exception, with higher energy prices potentially helping at the margins. A weaker yen, post the dovish BOJ hold, has also been a headwind at the margins. Overall losses against the USD have been fairly modest though. Tomorrow the main focus will be on the 1yr and 5yr LPR outcomes in China, no change is expected. Also due is Taiwan export orders.
- USD/CNH has mostly been supported on dips today, albeit within confined ranges. The pair was last near 7.1450. Spot USD/CNY has also recovered, back to 7.1430. Weaker equity sentiment in HK, amid further property related headwinds has not aided yuan sentiment. The USD/CNY fixing was set higher, albeit with the error term widening.
- 1 month USD/KRW sits around 0.20% above Monday NY closing levels in recent dealings. The pair at 1304.6 is back above its 20-day EMA, but firmer resistance is likely towards the 1315/20 region which has marked recent highs and were more EMA resistance points are evident. Higher USD/JPY levels post the on hold BOJ outcome have likely weighed on the won at the margins. Still to come is the BOK minutes from the most recent policy meeting.
- The Rupee has ticked lower in early dealing this morning as post-FOMC gains are trimmed. An uptick in US Tsy Yields is weighing as FOMC officials pushed back on 2024 rate cut expectations. USD/INR sits at 83.19/20, ~0.2% above yesterday's closing levels. A reminder that the local docket is empty this week.
- USD/IDR has been supported on dips during today's session, the pair last near 15510, little changed for the session, but up from earlier lows (15488). We remain within recent ranges for the pair, with Thursday's BI meeting the next major local focus point. A firmer core yield backdrop has likely weighed in recent dealings.
- The Ringgit was pressured on Monday as higher US Tsy Yields weighed, losses have been trimmed in early trading this morning. USD/MYR has broken the 20-Day EMA (4.6820) and is consolidating above the measure this morning. Novembers Trade Surplus was narrower than forecast, printing at MYR 12.41bn, a surplus of MYR 16.54bn was forecast.
- The SGD NEER (per Goldman Sachs estimates) is steady this morning, we remain well within recent ranges. The measure sits ~0.4% below the top of the band. USD/SGD is consolidating yesterday's gains above the $1.33 handle however ranges are narrow thus far today. Firmer US Tsy Yields added a level of support to the pair yesterday, several FOMC officials pushed back against the markets rate cut expectations for 2024. A reminder that the data docket is empty for the remainder of the week.
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AUSSIE 10-YEAR TECHS: (Z3) Dovish RBA Cements Last Week’s Strength
- RES 3: 96.160 - High Jul 20
- RES 2: 96.050 - High Sep 4 and a key resistance
- RES 1: 95.924 - High Sep 15
- PRICE: 95.525 @ 16:23 GMT Nov 17
- SUP 1: 94.965 - Low Oct 31
- SUP 2: 94.951 - Lower 2.0% Bollinger Band
- SUP 3: 94.242 - 1.0% 10-dma envelope
Aussie 10yr futures returned higher following the US CPI print, nearing last week’s highs of 95.590 in the process. This reinforces the near-term bottom at 94.965. Nonetheless, nearby resistance remains intact for now, keeping the broader trend direction down. Key support and the bear trigger at 95.660/95.670, the Aug 17 low/Jun 17 2022 low has been breached, confirming the resumption of the medium-term downtrend. The focus is on 95.102, the 3.0% Lower Bollinger Band. Initial key resistance has been defined at 96.050, the Sep 4 high.
USDCAD TECHS: Support Remains Intact
- RES 4: 1.4070 1.236 proj of the Sep 19 - Oct 5 - Oct 10 price swing
- RES 3: 1.4021 2.0% 10-dma envelope
- RES 2: 1.3977 High Oct 13 2022 and a major resistance
- RES 1: 1.3855/3899 High Nov 10 / 1 and the bull trigger
- PRICE: 1.3738 @ 17:10 GMT Nov 17
- SUP 1: 1.3674/29 50-day EMA / Low Nov 6
- SUP 2: 1.3623 Trendline support drawn from the Jul 14 low
- SUP 3: 1.3496 50.0% retracement of the Jul 14 - Nov 1 bull phase
- SUP 4: 1.3417 Low Sep 29
USDCAD has recovered from Wednesday’s low and the 50-day EMA - at 1.3674 - remains a key support. Despite this week’s pullback, the trend outlook is bullish and the pair remains above 1.3629, the Nov 6 low. Furthermore, MA studies continue to highlight an uptrend. A resumption of gains would open the bull trigger at 1.3899, the Nov 1 high. On the downside, a clear break of the 50-day EMA would be a bearish development.
US: Biden's Approval Rating Continues To Slide
According to RealClearPolitics, President Biden is set to finish the week with the lowest net approval rating (-16%) he has experienced since August 10, 2022.
- The continued drift in Biden's approval comes amid a hectic week of public appearances at the APEC summit which may reflect poorly on his approval in the coming weeks as voter concerns over Biden's age and physically capacities tend to increase with exposure.
- A Quinnipiac poll released this week saw Biden's approval drop from 39% to the 37% since November 1, perhaps reflecting soft support from Democrats over Biden's handling of the Israel-Gaza war.
- The poor run of polling, particularly in battleground states, has intensified speculation that Biden may be pressed to step aside to clear the path for a more "electable" candidate.
- Betting markets see California Governor Gavin Newsom (D-CA) as the most credible candidate to replace Biden although it remains an low-probability this late in the campaign.
- News outlets have highlighted a seemingly ad-libbed remark from Biden this week stating of Newsom, "he could be anything he wants. He could have the job I’m looking for,” as evidence that Newsom may be in the equation, should Biden's support continue to crater.
- ElectionBettingOdds has programmed a new tracker suggesting that Newsom (70%) is significantly more electable than Biden (40%).
Figure 1: President Biden Approval Rating
Source: RealClearPolitics
