CNH Underperforms Further USD Weakness

Most USD/Asia pairs are lower, although USD/CNH has rebounded from fresh lows, as the fixing bias was tempered and trade figures disappointed. Spot KRW and MYR are up around 1% against the USD. THB has also recovered some ground but is still lagging broader USD trends. Spot INR is also showing a lower beta to USD weakness. Still to come is the Thai parliamentary PM vote. Tomorrow, Indian wholesale prices and trade figures print, along with South Korean money supply data. Singapore Q2 GDP is also out.

• USD/CNH sits above session lows, last in the 7.1740/50 region. The rough range for the session has been 7.16/7.18. CNH has underperformed despite a strong onshore equity tone and softer USD sentiment elsewhere. We had weaker than expected June trade figures, although the direct impact on CNH has been limited so far. The CNY fixing was firmer than forecast, but the miss narrower than the first part of July.
• 1 month USD/KRW hasn't been able to break sub 1270 so far today, although earlier moves above 1277 drew selling interest. The BoK left rates on hold at 3.50% as expected. The central bank expects to stay restrictive for some time. The statement and Governor Rhee's speech were slightly hawkish, as the bank left the door ajar for another rate hike and stated core inflation was slightly firmer than expected compared to May estimates.
• USD/THB got to fresh lows near 34.50, but has rebounded back to 34.64/65 since. The baht is lagging broader USD trends, as the market awaits the outcome of the parliamentary PM vote. Pita has been the only candidate put forward at this stage. The vote is scheduled for 5pm local time.
• The Rupee has firmed in early dealing as softer US CPI and a firmer than expected Indian CPI print weigh on USD/INR. The pair now sits a touch above the 82 handle printing its lowest level since 4 July. USD/INR is ~0.2% lower than Wednesday's closing levels. Indian CPI rose in June and was firmer than expected, printing at 4.81% Y/Y vs 4.60% exp ticking higher from May's print which was a 25-month low. The uptick in CPI may delay any potential rate cuts as RBI will have to wait longer for CPI to reach the mid-point of its 2-6% target band. Also on the wires yesterday was May Industrial Production which rose to 5.2% Y/Y from 4.2% in April.
• Weaker than forecast US CPI which crossed after yesterdays close is weighing on USD/MYR in early trade. The pair last prints at 4.6000/50 and is down ~1.1% thus far. On the wires yesterday May Industrial Production printed at 4.7% Y/Y, a print of 0.0% had been expected. Manufacturing Sales Value rose 3.3% Y/Y in the month. Looking ahead the data local calendar is empty until June Trade Balance which crosses next Thursday.
• The SGD NEER (per Goldman Sachs estimates) has retreated from fresh cycle highs, printed in the aftermath of yesterday's US CPI print, to sit a touch softer in early trade on Wednesday. We sit ~0.5% below the top of the band. Broad based USD weakness post US CPI saw USD/SGD fall ~0.7% to print a fresh month to date low, the pair sits on the $1.33 handle and is at its lowest level since 11 May. Looking ahead; on the wires early tomorrow we have the Advance Q2 GDP print, a fall of 0.2% Q/Q is expected.