Asia FX Gains Tempered By Regional Equity Losses, BI & BoT Still To Come

USD/Asia pairs are up from earlier lows, with regional equity losses and some US yield stability, providing USD support. The Korean won has marginally underperformed, unwinding some of the recent strong gains. USD/CNH has edged up to 7.1300. USD/MYR looked to test YTD lows earlier, but is now back above 4.3700. Still to come today is BoT and BI decisions in Thailand and Indonesia respectively. No changes are expected, but the market focus is easing risks for both central banks.

• USD/CNH has firmed back to 7.1300, moving the pair away from a test of 7.1000 in the near term. The USD/CNY fixing held above 7.1300, close to market expectations, suggesting the authorities don't want to add any fresh fuel to the current appreciation trend. Weaker tech equity trends have weighed at the margin.
• Spot USD/KRW has been supported again sub the 1330 level. The softer regional equity tone not helping won sentiment. Exports looked to have recovered further in August, which could help keep upticks in the pair sold by the market. The RSI is oversold territory though ahead of key event risks with the BoK decision due. No change is expected.
• USD/MYR got to YTD lows in the first part of trade, around 4.3630. but we sit higher now, last near 4.3750, still slightly stronger in MYR terms for the session. With no significant data today, MYR will take it’s lead from IDR, given the Bank of Indonesia meeting today. Tomorrow Malaysia will release CPI data for July with expectations are for a modest increase.
• USD/THB is slightly higher, last near 34.30, around 0.20% weaker in THB terms. The Bank of Thailand (BoT) announces its decision later today and is widely expected to leave rates at 2.5%, which it considers to be “neutral”.
• USD/IDR is also up modestly, last around 15460. The BI is seen on hold later, with a cut potential in rates potentially undermining recent IDR gains.