ASIA FX: USD/PHP & USD/IDR Firm With US Yield Bounce, Rupiah Up For The Week
In South East Asia FX, the USD has mostly firmed, amid positive carry over from Thursday's session, where the PPI beat aided US Tsy yields. PHP has lost over 0.40%, while IDR is down 0.30%.
- USD/IDR is back above 16160, up around 0.30%. Recent lows rest at 16090 and IDR is still up around 0.80% for the week, the best performer in EM Asia FX. Local stocks hit a fresh record high earlier, but gains have since been pared and we are back around flat. Focus is on President Prabowo's annual address, while the 2026 fiscal outlook will also be discussed later. Aiming for better growth, but along with fiscal responsibility, will market watch points.
- USD/PHP has risen back above 57.00 into the 57.15/20 region. This is quite a bounce from yesterday's 56.65 low. It puts us back above all key EMAs but these points haven't been a strong inflection point for the market of late. Current levels marked highs for the pair this week, while earlier in May we were above 57.50. June remittances were stronger than forecast, up 3.7% y/y (2.8% was forecast).
- USD/THB is up a more modest 0.15%, last near 32.42. Earlier highs were at 32.49, so we remain within recent ranges.
- USD/MYR is back around 4.2190, up around the same amount, but still 0.55% stronger in ringgit terms so far this week. Earlier lows this week were at 4.1865, which has been a support zone for the pair going back to early May.
- USD/SGD is down slightly, last under 1.2840, but is close to Thursday highs (1.2852). SGD may be seeing some benefit from firmer G10 levels versus the USD, most notable JPY (up 0.40%).
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FOREX: Asia FX Wrap - BBDXY Surges Above 1200, Can It Build On This ?
The BBDXY has had a range of 1206.31 - 1208.31 in the Asia-Pac session, it is currently trading around 1207, -0.05%. The BBDXY surged higher with US yields in response to the CPI print. “Today’s inflation print showed that tariffs are having an impact on core goods and that impact is likely to get larger from here, limiting how much the Fed can cut and boosting the dollar,” said a currency strategist at Barclays” - BBG
- EUR/USD - Asian range 1.1601 - 1.1616, Asia is currently trading 1.1615. The pair is testing its first support around the 1.1600 area. The price still looks a little stretched in the short term and is vulnerable to any correction in the USD, first support around 1.1600 then more importantly the 1.1450 area.
- GBP/USD - Asian range 1.3382 - 1.3401, Asia is currently dealing around 1.3385. Price has rejected the move higher and Bailey’s hint that bigger rate cuts are on their way if the job market deteriorates further has added further headwinds. The pair has moved very quickly to test important support around 1.3350/1.3400. I would think there could be demand first up around here but a sustained break below and a deeper pullback towards 1.3000/1.3200 could be on the cards.
- USD/CNH - Asian range 7.1733 - 7.1757, the USD/CNY fix printed 7.1526, Asia is currently dealing around 7.1840. Sellers should be around on bounces while price holds below the 7.2000 area and the PBOC manages the fix lower. Above 7.2000 and we could see a test of the USD Shorts.
- Cross asset : SPX -0.15%, Gold $3335, US 10-Year 4.475%, BBDXY 1207, Crude oil $66.76
- Data/Events : Italy CPI & Trade Balance
Fig 1: GBP/USD Spot hourly Chart
Source: MNI - Market News/Bloomberg Finance L.P
BONDS: NZGBS: Closed Near Session Bests With A Steeper Curve
NZGBs closed slightly mixed with a steepener 2/10 curve. Benchmark yields finished 1bp lower to 1bp higher.
- NZGBs held by international investors increased to 62.7% from a month earlier in June.
- The fortnightly whole milk powder auction saw prices rise 1.7% versus the previous auction result, per GDT. This put prices back to $3928, from $3859 prior. It was the first rise since early May for the auction outcome.
- Swap rates closed little changed.
- RBNZ dated OIS pricing closed slightly firmer across meetings. 18bps of easing is priced for August, with a cumulative 32bps by November 2025.
- Tomorrow, the local calendar will see June food price data, with Q2 CPI on Monday.
- (Bloomberg Economics) -- New Zealand’s June price data are likely to show inflation holding in the Reserve Bank of New Zealand’s 1%-3% target band. In May, food prices rose 0.5% month on month, following a 0.8% gain in April. In year-on-year terms, prices climbed 4.4% after rising 3.7% in April.
- Tomorrow, the NZ Treasury plans to sell NZ$200mn of the 4.50% May-30 bond, NZ$200mn of the 4.25% May-36 bond and NZ$50mn of the 1.75% May-41 bond.
NZD: Asia Wrap - NZD/USD Has Broken Support, Risk Is A Move Back To 0.5850
The NZD/USD had a range of 0.5944 - 0.5966 in the Asia-Pac session, going into the London open trading around 0.5945, +0.01%. The USD has surged higher on the back of the US CPI showing clear signs that tariffs are beginning to impact the core goods data. US yields and the USD have both reacted as the market further reduces its rate cut expectations for the year. NZD/USD has broken below its recent support just below 0.6000 and the price action now suggests we could have a look back towards the important 0.5850 support area. Look for supply now on bounces back towards 0.6000 to cap initially.
- (Bloomberg Economics) -- New Zealand’s June price data are likely to show inflation holding in the Reserve Bank of New Zealand’s 1%-3% target band. In May, food prices rose 0.5% month on month, following a 0.8% gain
- "NZ JUNE GOVT. BONDS HELD BY FOREIGNERS RISE TO 62.7%" : BBF
- NZ Milk Prices Rise At Auction For The First Time Since May : Overnight the fortnightly whole milk powder auction saw prices rise 1.7% versus the previous auction result, per GDT. This put prices back to $3928, from $3859 prior.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6000(NZD382m). Upcoming Close Strikes : 0.5932(NZD317m July18). - BBG
- CFTC Data shows Asset Managers added slightly to their newly built longs in NZD +9229, the Leveraged community added slightly to their shorts last week -8654.
- AUD/NZD range for the session has been 1.0942 - 1.0970, currently trading 1.0970. The cross has broken out of its recent range and is now trying to push through the more pivotal 1.0950 area. Dips back to 1.0850/1.0900 should now be supported as the pair tries to build momentum to move higher.
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
