Asia Wrap : Just currency views on THB, HKD and AUD

Stephen Innes SPI Asset Management

HKD funding continued to tighten ahead of the big upcoming IPO, which is reported to be oversubscribed and continues to clog the cash markets. Tom/next traded up to 12 today forcing the short date curve out. And while this feels completely overdone, it's having a positive effect on the HKD which is trading stronger HIBOR lifts vs the FOMC turning dovish.

THB remains rangebound despite Bank of Thailand saying they see Q2 GDP growth at less than 3% y/y, and they stay open to rate cuts as the economy faces downside risk and that they are worried about baht strength It looks like a bright dollar buy signal, but traders are concerned about strong inflows

Australia retail sales were a tad weaker, but AUDUSD continued to head higher. AUDUSD remains in positive territory this week despite dovish RBA inclination, but the markets are short and getting no joy so with strong equity market performance even more so if we see Gold pushing higher again as the historically tight AUD-Gold correlation could see a push towards the 200-day moving average at 0.7098 as short positions cover.

Author

Stephen Innes

SPI Asset Management

With more than 25 years of experience, Stephen has a deep-seated knowledge of G10 and Asian currency markets as well as precious metal and oil markets.

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