China Quarantine News Leaves USD/CNH Comfortably Off Highs

USD/Asia pairs are mostly higher, in line with a firmer USD tone against G10. USD/CNH is the exception, as headlines of a potential cutting of inbound Covid quarantine requirements has lifted sentiment this afternoon. USD/KRW and USD/TWD are also away from worse levels. Still to come is Taiwan export orders and the BI decision, see this link for more details. Tomorrow the focus will be on South Korea first 20 days trade data.

• USD/CNH spiked to 7.2800 in early trade but has spent much of the rest of the session trending lower. The extra kick came this afternoon on reports the China officials are considering cutting inbound covid quarantine to 7 days from the current 10, although this is yet to be presented to top leaders. The pair hit a low near 7.2350, but we are now back in a rough 7.2400/7.2500 range. Earlier the CNY fixing was the strongest on record relative to expectations, while the 1yr and 5yr LPR rates were left unchanged.
• USD/KRW 1 month found early selling resistance above 1436, but dips sub 1430 have been supported. Equities are still down 1% but away from worse levels.
• USD/TWD has cemented its break above 32.00 (last 32.15). Onshore equities are weaker and net equity outflows continue. The 1 month NDF is back to 32.11, away from recent highs near 32.20. The market expects -5% y/y dip in September export orders which print later.
• USD/INR has pushed above 83.00, last 83.15. This follows yesterday's +0.76% gain in the pair. The sharp moved followed resistance above 82.40 giving way. Onshore equities are weaker, down 0.20%, while onshore bond yields are +5bps in the 10yr to 7.50 for the session so far.
• USD/IDR is close to session highs, last near 15580, +0.50% for the session so far. Again, this is fresh highs back to early 2020. Bank Indonesia is expected to raise the 7-Day Reverse Repo Rate by 50bp, although analysts are split. Out of the 31 surveyed by Bloomberg, 19 are siding with the median estimate, 11 expect a 25bp move and 1 is forecasting a 100bp rate rise.
• Bangko Sentral ng Pilipinas vowed to "utilise other tools to respond to fluctuations in exchange rate," such as liquidity management measures, as it intervened in FX markets less than its peers. Assistant Gov Sicat said the central bank was trying to "smooth out excess daily volatility rather than defend any specific level or trend," even as PHP59 has provided a line in the sand for USD/PHP over the past three weeks.
• USD/MYR is just off session highs, last close to 4.7275. Malaysia will hold the 15th general election (GE15) on November 19, the Election Commission said after a special meeting in its headquarters on Thursday.