Asia Open - Overnight Highlights

EMERGING ASIA

EM currencies perform mostly stronger against the USD as the greenback accelerated its decline after Powell kept the doors open for a 50bps cut in September. KRW saw the largest gains of 1%, followed by SGD and IDR 0.71%, CNH 0.43%, CNY 0.37%, THB 0.24%, MYR 0.07%, INR 0.06% and HKD 0.02%.

USD/CNH is trading lower at 7.1162  from 7.1467 previously closed. Onshore spot USD/CNY is trading lower at 7.1209 from 7.1444 previously closed. 12 month NDF followed both the on/offshore market and is trading lower   at 6.9280 compared 6.9507 to previously closed.

USD/IDR spot market is trading lower at 15492 from 15600 previously closed. 1 month NDF is trading lower at 15415 from 15751 previously closed.

USD/INR onshore spot market  is trading lower at 83.90 from 83.95 previously closed. 1 month NDF is trading lower at 83.89 from 84.00 previously closed.

North America Session

The USD fell noticeably across the board in North America after Fed chair Powell signalled a September rate cut and did not rule out 50bps rather than 25bps.  U.S. bond yields fell.  The sense is that the Fed could act quicker than other G10 central banks in the coming months, which can persistently hurt USD sentiment.  Thus though the ECB is widely expected to cut in September, the next move is not expected until December and this has helped EUR sentiment versus the USD.  Focus into next week is whether USD/JPY builds further momentum towards 142. 

BOE Bailey key quotes in Jackson Hole were that it is too early to declare victory against inflation and the course will be a steady one.  This suggests gradually rate cuts and argue for 25bps November, with no move in September.  This helped give GBP a little extra momentum and the market is biased to test 0.8450 next week.