Broad Based Rally, Although Baht Outperformance Continues

USD/Asia pairs are lower amid continued broad USD weakness. USD/CNH has broken back sub 6.8000, as China re-opening optimism continues. The won and the baht have also rallied strongly, while INR and IDR remain laggards. The regional data calendar is light in the first part of this week, with just South Korea BoP figures and Philippines trade data out tomorrow. China aggregate credit figures for Dec are also due this week.

• USD/CNH has tracked lower for most of the session. We had a brief blip higher, as the CNY fixing printed weaker than expected, but the pair found selling interest above 6.8200. We got to a low of 6.7850, but now sit slightly higher. Onshore CNY spot has arguably led moves today, with USD/CNY threatening to break sub 6.7800 at the time of writing.
• 1 month USD/KRW is down to 1244 after touching a low close to 1242. The firmer equity tone (+2.53% for the Kospi) and spill over from the China re-opening theme continue to benefit the won. Late May 2022 lows around 1235 are now in sight.
• USD/INR is lower, last around 82.35. Note the simple 50-day MA comes in at 82.23. The pair broke this support point on a number of occasions in the second half of last year but couldn't sustain it. This Thursday CPI and IP figures print, with inflation to help frame the RBI outlook in the first part of this year.
• USD/IDR is also lagging broader USD weakness. The pair is back to 15581 but has found support ahead of the 15550 level in recent weeks so be mindful of this level.
• USD/THB has played catch up with USD weakness post Friday's onshore spot close. We have fallen back close to 33.50, nearly 1.6% firmer in baht terms for the session. There is some caution around how quickly China arrivals will recover, but the market doesn't want to miss what is expected to be a positive trend through 2023. Better equity market sentiment and continued offshore inflows are also aiding baht moves. The baht remains comfortably the best performer within Asian FX YTD 2023.