Asian FX Mostly Lower Ahead Of FOMC

USD/Asia pairs are mostly higher, albeit with INR and IDR and PHP showing some resilience. The mostly weaker regional equity tone and firmer USD against the majors have been headwinds today for Asia FX. Still ranges are mostly tight ahead of the FOMC later. Still to come in the region today, is Thailand trade figures, as well as Taiwan and Hong Kong Q4 GDP. Tomorrow the South Korea Jan trade update is out, as well as the China Caixin manufacturing PMI and other regional PMIs.

• USD/CNH has held tight ranges for Wednesday trade to date. The pair last near 7.1900, well within recent ranges. The official Jan PMIs were mixed, although manufacturing staying wedged closed to 49.0 still suggests more can be done to boost momentum. Local equities are in the red, with familiar drivers still at play.
• 1 month USD/KRW has firmed back to 1333/34 around 0.50% weaker in won terms for the session so far. A weaker tech equity lead is weighing. Still, the pair remains comfortably within recent ranges. Dec IP figures were stronger than expected earlier on rebounding chip production. Tomorrow the focus will be on full month Jan trade figures.
• Spot USD/IDR was above 15800 in earlier trade, but now sits back below this level (last 15780). This may indicate moves above this figure level is drawing an intervention response from the authorities. Today BI governor Warjiyo said that monetary policy will ensure rupiah and price stability, demonstrating that the focus of the central bank remains on FX stabilisation. Resolution of the political uncertainty should help with this, given economic fundamentals are supportive. BI is hoping to be able to cut rates in H2 2024 as the currency should have strengthened by then.
• USD/INR is down slightly, but continues to exhibit very low volatility. The pair was last near 83.05/10, so slightly outperforming the firmer USD trend elsewhere.
• USD/PHP spot is close to unchanged last just under 56.40. We had Q4 GDP stronger than expected earlier, albeit still below the government's full year growth target. Onshore calls for easier policy settings to boost domestic consumption were evident. Local equities are up strongly so far today, the PCOMP last +1.10%.