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CNH Aided By Equity Bounce, THB Rebounds, BI Still To Come


USD/Asia pairs are mostly lower, with only a few pockets of USD strength. USD/CNH has broken to fresh lows going back to the end of last month, the pair last near 7.1850, with surging HK and China equities helping sentiment. Gains elsewhere have been more muted, although THB has rallied close to 0.55%. Still to come today is the BI decision with no change expected. The BoK decision headlines Thursday's session, with a steady hand also expected. India PMIs are also due tomorrow.

  • USD/CNH got to a low of 7.1811 before support emerged. The pair last near 7.1870. After an indifferent start, both HK and China bourses have rallied stronger. Property and tech names have led the move higher, amid efforts to support the housing market onshore. Note that Northbound Stock Connect flows have total 12.6bn yuan so far today. For USD/CNH downside focus will be the 200-day EMA, which comes in near 7.1740.
  • 1 month USD/KRW is close to unchanged, last near 1332.5. There has been little spill over from lower USD/CNH levels. Onshore equities are modestly weaker, last down around 0.30%, while offshore investors have sold -$153.2mn of local shares so far today. Earlier data showed positive business manufacturing sentiment and resilient detail for the first 20-days of trade data in Feb. Still, this hasn't shifted won sentiment, the pair remaining comfortably within recent ranges.
  • USD/IDR spot and the 1 month NDF are little changed, as the BI decision comes into view. Spot USD/IDR was last near 15660/65. BI is widely expected to leave rates unchanged at 6.0% and is not yet likely to move to an easing bias as growth remains robust, inflation is at the mid-point of the band and the IDR is still at weak levels.
  • Spot USD/THB is back sub 35.90, around 0.55% stronger in baht terms for the session so far. Some of this reflects catch post yesterday's onshore spot close (as the USD generally weakened). BBG also notes some analysts stating that the BoT is likely to resist the PM's call for easier policy settings. Onshore equities have also rallied today, last around +0.80% higher, while gold has risen for the fourth straight session. For USD/THB we aren't too far away from the 20-day EMA at 35.77. Yesterday's highs were at 36.185.

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