ASIA FX: USD/CNH Testing Sub 7.2500 On Tariff Hopes

Asian currencies are stronger across the board, albeit with North Asian currencies lagging some gains seen in South East Asia. Broader USD sentiment is softer, following earlier Trump tariff comments, while yen is rallying following an arguably hawkish BoJ hike. 

• There has been strong focus on USD/CNH, which is dipping sub 7.2500 at the time of writing, fresh lows for this week. We sit a little higher now, but a clean break sub 7.2500 could see Dec lows at 7.2420/25 targeted, while late Nov lows were around 7.2300. This would also put us sub the 100-day EMA.
• Trump's remarks, which were the second part of his Fox News interview, highlighted he would rather not use tariffs on China. The comment was made in the context of whether the US could strike a deal with China around a variety of issues, including trade. Trump said tariffs were a powerful tool that the US could use, while also suggesting China would likely need/want US energy resources.
• The above remarks don't mean fresh tariff hikes are off the table for China, but does suggest the two sides may be able to negotiate or that earlier threats this week around a Feb 1tariff hike for China may not be realized. There is no doubt that pre-inauguration that fresh tariffs could have already been imposed on China by now.
• The CNH is up close to 0.50% at this stage. The won and TWD are also firmer, but lagging percent gains seen in CNH. USD/KRW got to lows of 1428.2, but sits back above 1430 now. USD/TWD is only down a touch, last near 32.70/75.
• In SEA, THB is leading up nearly 0.90% at this stage.