Dollar Firmer, CNH Steady Though, BI Decision Still To Come

USD/Asia pairs are mostly higher across the board in Wednesday trade to date. Some of this has reflected spot catch up with the USD at higher levels post yesterday's onshore closes. NDF levels have generally weakened in favor of USD strength as well though. USD/CNH has been the exception, which has found selling interest above 7.2200. Still to come is the BI decision with no change expected. Tomorrow, the calendar is light data wise.

• USD/CNH had a few brief probes above 7.2200, but the pair remained within recent ranges. We last tracked near 7.2170, with CNH outperforming stronger USD trends elsewhere (BBDXY +0.20%). Q4 GDP was close to expectations, while Dec activity figures were mixed. House prices and property related activity remained weak though, weighing on HK and China equity market appetite. Spot USD/CNY is higher but hasn't breached the 7.2000 level yet.
• 1 month USD/KRW has gravitated higher, with the 1 month NDF above 1343 in latest dealings, which is 0.50% weaker in KRW terms versus end Tuesday levels. Onshore equities have slumped more than 2%, while offshore investors have sold -$702.1mn in local equities so far today. Oct/early Nov highs in the 1 month NDF were close to 1360, which could be the next upside target.
• Spot USD/IDR sits near 15640, close to session highs and near mid Dec highs (near 15670) from late last year. IDR weakness is line with broader USD gains and souring risk appetite in the equity space. The main focus later will be the BI decision. No change is expected, but with IDR breaking above 15600, FX stability is likely to remain a key focus point, with inflation under control.
• Spot USD/SGD continues to push higher. The pair was last near 1.3450, quite close to the simple 200-day MA (which is just above 1.3460). We haven't breached this resistance point since mid Nov last year. Earlier data showed Dec exports were weaker than expected (-1.5% y/y, versus +3.0% forecast). Electronic exports remained a drag at -11.7% y/y.
• Elsewhere USD/THB continues to press higher, last above 35.60, closing in on Dec highs near 35.84. Headlines crossed that the digital wallet scheme will not be rolled out by May. The authorities still sound optimistic around tourism arrivals for 2024 and expected revenue from the sector.