Dollar Stronger Against North East Asian Currencies, Steadier Trends Elsewhere

USD/Asia pairs are seeing gains in terms of North East Asia. USD/CNH through 7.3100, while USD/KRW spot is testing above 1390. TWD is also weaker. Fresh highs in USD/JPY are not helping in this space. There are steadier trends in South East Asia, with lower US yields a positive, while equity markets are mostly higher for this region as well. Tomorrow, the regional data calendar is quiet.

• USD/CNH has risen above 7.3100, although moves remain modest in percentage change terms. We had a higher USD/CNY fix relative to market expectations, while the Caixin Services was weaker than forecast. These factors, along with a softer local equity backdrop, remain headwinds for the yuan, along with negative spillover from continued yen losses.
• Spot USD/KRW is testing higher, moving towards the 1392 level in earlier dealings. Onshore talk of potential a lower rate outlook, which was mentioned by the Prime Minister today is likely weighing on won sentiment. Market pricing for easier policy settings has risen post yesterday's weaker headline CPI result. Weakness in CNY and JPY will also be a factor for the won. Upside focus may rest on late June highs near 1395.
• Spot USD/TWD continues to gravitate higher, the pair getting close to 32.70 in earlier trade. This is fresh highs since 2016 for the pair. Equity outflow pressures have been evident in recent weeks, although tech equity sentiment is on a more stable footing in recent sessions.
• Spot USD/THB has been relatively steady, last in the 36.80/85 range. We had earlier headlines cross from the World Bank that they had revised down the country's 2024 growth projections to 2.4%, although this isn't too far from the consensus. The WB agreed with the steady BoT hand. Other headlines crossed from the Thailand MoF that the digital wallet scheme will have a bigger impact on growth next year rather than this year (BBG).
• Other SEA currencies have been very steady.