CNH Steady Despite Better Equity Tone, PHP Underperforms On Weaker Equities

USD/Asia pairs tracked lower in the first part of trade, but sit away from session lows in latest dealings. USD/CNH has struggled to challenge lower, despite a firmer equity market backdrop. THB has outperformed marginally, while PHP has underperformed the other way. Most other pairs have exhibited reasonably tight ranges, despite a mostly firmer regional equity backdrop. The regional data calendar is quiet tomorrow.

• USD/CNH has seen a rough 100pip range today, with support evident around 7.2850, while moves above 7.2950 have drawn selling interest. Local equities have remained a focus point and after a negative open we saw better sentiment as we progressed to the break. The CSI 300 last around 1% higher, down from session highs, although not imparting much positive impetus for CNH. USD/CNH was last above 7.2900, little changed for the session.
• 1 month USD/KRW has been able to see fresh downside beyond 1317, we last tracked near 1320. Onshore equities are higher, but offshore investors have been net sellers of local shares today. The government plans only a modest increase in government spending next year, which should see bond issuance lower in 2024 versus this year.
• Spot USD/HKD's uptrend remains intact, the pair moving above 7.8460, which is where track close to in the first part of dealings on Tuesday. We are above mid-May highs, with the 7.8500 level (top-end of the peg band) the next upside target. 1 month Hibor fell to 3.755% today, lows back to the first part of May. The 3 month is back to 4.45%, also multi-month lows.
• USD/THB is tracking lower in the first part of dealing today, las near 35.17, around 0.30% firmer in baht terms for the session so far. This keeps us within recent ranges, with the 20-day EMA at 35.025 a potential support point on the downside. On the tourism front, the new PM has stated the aim is to boost flight capacity by 20% ahead of peak season. Srettha is also targeting 3.3t baht in tourism revenue next year, up from a projected 2.38t baht this year.
• USD/PHP sits higher, last at the 56.75 level. We remain well within recent ranges, with 57.00 likely representing a cap on the topside (or at least heightened intervention risks at this level), while the 20-day EMA sits lower at ~56.21. The peso is underperforming the softer USD trend elsewhere today. The local equity tone remains a PHP headwind, Equities appear under pressure from the softness in Q2 growth and signs of slowing bank lending activity.