CNH Gains Slow On Modest Equity Bounce

USD/Asia pairs have been mixed to start the week. Much of the focus has been on the return of onshore China markets, but overall moves have been muted. USD/CNH sits a touch lower, last near 7.2100. The won has weakened a touch, despite another solid onshore equity rise. THB largely shrugged off a Q4 GDP miss. Tomorrow, we have the China 1yr and 5yr MLF decisions. The 5yr is expected to be cut by 10bps.

• USD/CNH was lower in the first part of trade, but couldn't test sub 7.2000. We last tracked bear 7.2090. Optimism was high around a positive equity open, which eventuated, but there wasn't much follow through. Weaker HK shares have weighed as well. Travel and spending data points to a pick up in activity through the LNY relative to prior years, but some housing market painted a still depressed picture.
• 1 month USD/KRW was supported sub 1330 in early trade, last tracking near 1333, slightly above end levels from NY trade on Friday. This comes despite a positive equity tone, although the correlation with the won is clearly lower over the past month. Tomorrow, consumer confidence prints for Feb. Later on this week the BoK is expected to remain on hold.
• USD/THB dipped in early trade, but found support just under 35.90, as Q4 GDP fell noticeably more than expected. We rebounded but couldn't get back above 36.00. Higher gold prices are likely helping THB at the margin. Thailand’s Q4 GDP print was disappointing showing the economy contracted 0.6% q/q sa to be up only 1.7% y/y in the final quarter of the year. 2023 growth slowed to 1.9% from 2022’s 2.6%. The economy was driven by private consumption and exports as government spending contracted and import growth improved. The government was already putting pressure on the Bank of Thailand to cut rates and that increased today with the NESDC saying monetary policy should boost the economy.
• USD/SGD sits lower, last near 1.3450. This is line with some USD softness against the majors. Earlier Feb lows rested back near 1.3350. The SGD NEER is little changed relative to the top end of the band compared to the end of last week, still -0.40%.
• USD/IDR has been relatively steady in spot terms, last near 15635. The 1 month NDF sits lower at 15650, versus closing levels at 15671 last week. This keeps us within recent ranges though. The BI decision is this Wednesday, with no change expected.