Asian currencies back to pre-brexit levels - BTMU

Analysts at Bank of Tokyo Mitsubish explained that risk appetite returned this week and most USD/EM Asia have already returned to pre-#Brexit levels, apart from RMB, PHP and SGD.

Key Quotes:

"USD/CNY lived in its own world (not so surprisingly) and hovered between 6.68-6.70 over the last forecast period. Traders said onshore RHS flows were much bigger these days but USD/CNY remained capped below 6.70 amidst fear for stage management.

USD/CNY's sidewalk should continue for the week ahead; after all the pair did rise all the way from 6.45 level in March. The removal, or alleviation, of the CNY/CNH basis still tops China's FX to-do list before the redback's SDR basket participation. The entire USD/CNH curve could be under pressure especially the back-end e.g. basis in spot was only 100pips but in 1y stayed wide at 1000pips. 2Q real GDP and June real activities data out tomorrow is more likely to disappoint than not."