Asia FX Mostly Steady, Outperforming Higher Beta G10 FX

Compared to the major G10 currencies, Asia FX has been very subdued so far in Wednesday dealings. Higher beta plays like KRW and IDR are outperforming the continued weakness for AUD and NZD etc. A softer commodity price backdrop is also generally a terms of trade positive for most Asia currencies, given net energy importing status for most economies. The weaker USD/JPY trend will also be aiding some regional FX from a competitiveness standpoint. These factors have helped offset a generally softer equity tone, with disappointing US tech results weighing on tech futures.

• USD/CNH sits little changed, last near 7.2870, down slightly on on the day. The pair is likely enjoying some benefit from firmer yen levels, although weaker onshore asset sentiment is an offset. Local equities are mixed today, but the CSI 300 is holding the bulk of yesterday's 2.1% fall. The USD/CNY fixing got to a fresh high since Nov 2023 but didn't impact sentiment.
• Spot USD/KRW is slightly firmer in won terms, last near 1385. Similar factors are in play to CNH. We have stronger yen levels helping to offset the weaker equity tone. The Kospi sits 0.50% lower so far today.
• USD/THB has seen decent pull back, the pair off around 0.40%, last in the 36.05/10 region. Some of this reflects catch up to lower USD/JPY levels. Thailand's constitutional court will decide on August 14 on whether PM Srettha should be removed from office. This follows a cabinet appointment back in April, which some Thai senators said was ethical breach (see this BBG link). Meanwhile digital wallet handouts, designed to boost the economy will be in Q4 of this year.
• USD/IDR is a touch higher, last around 16230. This is only around 0.10% weaker in IDR terms, with the softer global equity backdrop a likely headwind.
• USD/MYR is up a touch as well to 4.6750. Earlier data showed weaker than forecast June CPI pressures. The headline print was 2.0%y/y versus 2.2% projected.
• Note Philippine markets have been closed today due to adverse weather conditions.