Dollar Stronger Across The Board

USD/Asia pairs are higher across the board today, with a firmer USD backdrop against the majors, aided by higher US yields, boosting the dollar. Regional equity sentiment has also been somewhat weaker, weighed by the softer China Caixin Services PMI print. USD/CNH is back above 7.2900, while KRW and THB have been the weakest performers. Tomorrow, the data calendar is light with the Singapore PMI and Taiwan CPI on tap.

• USD/CNH has risen in sympathy with broader USD trends and a weaker onshore equity backdrop. The Caixin services PMI was also sub expectations. USD/CNH got to a high of 7.2961, after opening at 7.2755. We have settled back closer to 7.2900 in recent dealings. Late August highs rest just above 7.3100.
• 1 month USD/KRW is noticeably higher in the first part of trade today. The pair is +0.45% stronger, last near 1322.50. Earlier highs were at 1324.50. We are back above the 20-day EMA, which comes in close to 1320, while further support has been evident around the 50-day EMA, near 1311. Broader USD sentiment is weighing on the won, with all USD/Asia pairs higher at this stage. The won, along with the baht, are the weakest performers though. Earlier we had Q2 GDP revisions, which were unchanged, while August CPI was stronger than expected.
• USD/HKD spot sits above Monday lows. Yesterday we got to ~7.8320, but have tracked higher in the first part of Tuesday trade. Offers were evident on an earlier move above 7.8400, the pair last at 7.8385. HKD weakness is line with broader USD gains, although US-HK short term rates have rolled over. The 3 month differential back to +85bps. 3 month Hibor rose +8bps today to 4.525%, the 1 month spiked back above 4%.
• The Rupee has opened dealing marginally softer on Tuesday, and sits at its lowest level in one week. USD/INR is ~0.1% firmer this morning and last prints at 82.7578/8000, the pair is holding above its 20-Day EMA (82.7123) after rising above the measure yesterday. S&P Global Services PMI ticked lower in August to 60.1, the Composite measure also nudged lower to 60.9 from 61.9.
• USD/MYR sits at its highest level since mid July, the pair is ~0.1% firmer today and last prints at 4.6605/20. Broader USD trends continue to dominate flows in recent dealing, the pair is ticking higher however ranges do remain narrow. Rice importer Malaysia is planning measures to ensure it has sufficient supplies of the grain following Indian export curbs that rattled global markets and sent prices soaring.
• The SGD NEER (per Goldman Sachs estimates) has ticked lower on Tuesday as the measure continues to nudge away from late Augusts cycle highs. We now sit ~0.6% below the top of the band. Broader USD trends have dominated flows in recent dealing, USD/SGD sits at its highest level in one week and last prints at $1.3565/70. July Retail Sales printed at 1.1% Y/Y below the expected 2.1%. The prior read was revised lower to 1.0%.
• Like the rest of the region, USD/PHP is seeing upside pressure in the first part of dealing today. The pair last in the 56.75/80 region. This is 0.25% weaker in PHP terms versus yesterday's close. We remain within recent ranges, though the pair is threatening an upside test, with mid August highs at 57.00 in focus. The August spike in inflation pressures don't help. It weighs on Philippines real yields and leaves the risk of tighter policy. BSP stated risks to inflation remain skewed higher, given transport fare hikes and wage adjustments. It still expects inflation to be back within the 2-4% target range in Q4.
• USD/THB continues to track higher, last 35.40, above late August highs, but sub mid-August highs near 35.60. Local equities have struggled, while portfolio outflows are still evident from local equities and bonds. August headline CPI inflation rose a stronger than expected 0.9% y/y after 0.4%. Core was in line with forecasts at 0.8% down slightly from 0.9%. Both are below the central bank’s 1% to 3% inflation target range. Inflation remains very low in Thailand but headline appears to have troughed due to rising energy prices.