Dollar Dips Mostly Supported, MAS Policy Review Due Next Friday

USD/Asia have traded mixed in the first part of Friday trade. At the margin USD dips have been supported, as the majors have softened slightly in the G10 space, as the US non-farm payroll print comes into view. The main focus early next week is likely to be the return of China markets from the Golden Week holiday break.

• USD/CNH was softer in earlier trade, but saw little follow through despite higher Hong Kong equities. The pair is back above 7.3100 (earlier lows were at 7.3023). Equity sentiment was buoyed in HK ahead of China markets returning on Monday, with recent growth upgrades cited as one factor, while optimism around China holiday spend was also noted.
• 1 Month USD/KRW sits slightly higher, last near 1348, against earlier lows around 1343.50. FX reserves for September dipped, in line with valuation moves. Onshore equities are modestly higher, but this hasn't positively impacted FX sentiment today.
• USD/INR sits slightly lower, last near 83.25. Ranges have been tight as the RBI delivered an on hold expected. This was widely expected, although the RBI noted they may conduct OMO sales to maintain system liquidity. This has weighed on local bond markets.
• USD/PHP has moved lower during today's session. We got to 56.57, but sit slightly higher now, last near 56.61. We aren't too far recent lows, which come in close to 56.50. A break sub this level could see the market target late August lows near 56.10. On the topside, recent highs remain marked close to 57.00. Outside of broader USD softness/consolidation in recent sessions, the sharp pull back in oil prices has likely aided PHP. The Citi terms of trade proxy has firmed back to mid July levels, although we remain in negative territory and sub early June YTD highs.
• USD/SGD sits above 1.3680 in latest dealings, well within recent ranges. The SGD NEER is off late September highs (per Goldman Sach estimates). Note the MAS policy review will be released next Friday.