Asian Currency Overview

USD/KRW traded a tight 1132.5-1136.8 range in Asia yesterday; last at 1134.5. The pair opened on its low but BOK bidding interest prompted modest short covering. Pair traded above 1136 before closing mid range at 1134.5 with traders saying the market is awash with gamma. Option players report a lot of selling of short dated Won calls around the 1120 area although some short covering noted of an 1125 strike in the one week. All up market the market believes that whilst the risk remains on the downside, it will be a slow grind lower. The Kospi closed flat. Overnight the implieds traded an 1135-1139 range on high volume before closing in NY at 1135/1136.

USD/TWD traded a broad 31.824-98 range in Asia yesterday on moderate volume of $575mln; last at 31.85. Equity inflows continue at a strong rate keeping pressure firmly on the downside in USD/TWD. Option players continue to report activity in RKOs as a proxy to Yuan appreciation. USD/TWD continues to grind away at the downside with offshore sellers the main drivers. Last nights trade numbers came in strong but within consensus; analysts warn that seasonal factors (read Lunar New Year) make January and February numbers unreliable. The Taiex closed up 0.1%. The only recorded trade through the implieds overnight was at 31.71; the 1-mth was last quoted in NY at 31.70/73. 

USD/CNY The PBOC fixed USD/CNY at 6.8265, down one pip from yesterdays fix. The OTC market has traded a tiny 6.8262-67 range. The 1-yr NDF last at 6.6400/30 unchanged from the previous NY close. The Shanghai Composite closed up 0.5%. Speculation of a one-ff revaluation continues to wane with the market somewhat in tune to the plethora of official comments over Yuan policy and believe that the PBOC will revert to gradual appreciation some time in Q2. Option wise players continue to report activity in the 2-3 month tenors however activity remains rather slow. China"s bevy of data releases start today with the trade numbers - CPI, retail sales et al are slated for release tomorrow (Thursday). Overnight the 1-yr dealt a 6.6380-6.6430 range before closing in NY at 6.6380/20.

USD/HKD remained confined to a 7.7583/14 range yesterday with the pair initially under pressure on speculation of the potential Yuan appreciation. A late rally above 7.76 on risk aversion was short lived with prices quickly reclaiming the 7.7590 handle. The Hang Seng closed up 0.05% with foreign inflows seeing weighing on USD/HKD. 

USD/SGD traded a modest 1.3990-1.4020 range in Asia yesterday; last at 1.4005. The pair was unable to make any ground on the downside with talk of MAS agent bids again supporting the pair below 1.40. The local Straits Times bourse closed up 0.18%. Overnight the range was extended to 1.3982 on the downside before closing in NY at 1.4000 with late buying right on the NY close very noticeable (again).