ASIA FX: USD Biased Higher, USD/KRW The Standout, Modest Moves Elsewhere

In North East Asia FX, the bias has also been for firmer dollar levels, although outside of USD/KRW, gains have been fairly modest. 

• USD/CNH has been supported ahead of the 7.1000 level. The USD/CNY fix rose and the fixing error was only just negative (hence no bias for a meaningfully stronger yuan). Still we haven't gotten back above 7.1100 either. Onshore equities continue to rally. The CSI 300 up a further 0.20%. A modest gain, but underlying tech trends remain quite strong. China's move away from Nvidia chips is buoying sentiment in this space.
• Spot USD/KRW has push back above 1385, up around 0.50%, while the 1 month NDF has lost 0.35% in won terms. This fits with broader USD gains, particularly in the G10 space, where the likes of AUD and NZD have lost ground on poor local data outcomes. Local South Korean equities have risen, up over 1.2%, but this hasn't aided FX sentiment. The wedge between USD/KRW spot and the US-SK 1y1y rate differential has closed somewhat. This differential fell to lows around +51bps at the start of the month but is now around +61bps.
• Spot USD/TWD is higher, holding above 30.05, but this is less than a 0.1% gain at for the USD this stage. Local equities are up over 1%, while we also have the CBC decision later, which is expected to see policy rates left on hold at 2.00%.
• USD/HKD is down slightly, last around 7.7750. Headlines equities are weaker, but the tech sub index is still rallying, with potential inflows into this space aiding HKD sentiment.