Continues To Rally, Aided By Yen Gains, Firmer Equities

USD/Asia pairs are lower across the board, albeit to varying degrees. USD sentiment has remained softer, and the stronger yen has certainly seen positive spillover to parts of the region. At this stage the KRW and IDR are the strongest performers. USD/CNH is down sharply for the week, although is seeing some support sub its 200-day EMA. Onshore markets in China return on Monday.

• USD/CNH got to lows of 7.1854, btu we sit back closer to 7.2000 in recent dealings 9which is right around 200-day EMA levels). For CNH, yen gains were a clear positive. CNH and JPY correlations (in level terms) still sit at 55% for the past 6 months. Focus will rest on the USD/CNY fixing, when onshore markets return on Monday. which should be aided by the lower USD levels in recent sessions (USD BBDXY off nearly 1% since Tuesday). The equity backdrop has also been positive since Hong Kong markets returned yesterday, while the Golden Dragon index surged 6% in Thursday US trade.
• 1 month USD/KRW got near 1360 in earlier dealings, but we sit slightly higher currently, last around 1362, still close to 0.30% firmer in won terms. Outside of the generally positive equity tones, remarks from BoK Governor have helped at the margins as well. Rhee stated that the central bank will have to review rate-cut timing given the Fed policy pivot delay and geopolitical risks. They are also watching won volatility.
• Elsewhere, IDR is around 0.55% stronger, the rupiah showing is higher beta characteristics. USD/IDR spot last under 16100, just up from session lows. The 1 month NDF has rallied a further 0.35%in IDR terms to 16100.
• USD/THB is also lower, last near 36.80, slightly up from session lows (36.76). We had Thailand CPI data cross the wires earlier. It was stronger than expected at 0.85% m/m, versus 0.48% forecast. The y/y headline was back into positive territory, although core was unchanged at 0.37% y/y. May inflation is expected to accelerate further on power and food prices.
• Elsewhere, USD weakness has been more modest. USD/PHP sits near 57.45/50, only down slightly for the session.