Dollar Supported, THB & MYR Lose The Most Ground

Most USD/Asia pairs are ending the week on a firmer footing, albeit to varying degrees. The USD has seen carry over support from higher US yields on Thursday and weaker regional equities today. MYR and THB have been among the weakest performers, while USD/CNH has edged to a fresh high for the week above 7.3000. Still to come today is Indian IP for September. Next week, China's 1yr MLF and October activity data out on Wednesday will be in focus.

• USD/CNH has made fresh highs for the week in Friday dealing, albeit marginally. We currently hold near 7.3000, a modest CNH loss for the session. Earlier the USD/CNY fixing ticked down a touch despite a firmer USD backdrop. This provided some relief for CNH but it wasn't sustained. Onshore & HK equities are weaker amid on-going growth concerns, highlighted by a PBOC advisor (who also stated this year's growth target will be met). Elsewhere, PBoC Governor Pan reiterated that the central government is paying close attention to local government debt risks in some provinces, while broader property risks remain manageable.
• Spot USD/HKD has been somewhat immune to the broader USD recover in recent sessions. We sit near 7.8080 in recent dealings, albeit up from earlier lows (7.8032). This was fresh lows in the pair back to early August. We got to 7.7926 then, a brief dip below the mid-point of the HKMA's peg band. HKD gains are in line with waning US-HK yield differentials. The 3 month spread back to +5bps, also lows from early August. A break below 0bps in this spread could herald a deeper move lower in USD/HKD. In the risk reversal space, we remain around recent highs, last near -0.35.
• USD/IDR sits near 15685 in recent dealings, down from earlier highs of 15695, but still ~0.20% weaker in IDR terms versus yesterday's closing levels. The pairs remains in a modest uptrend, largely following the rebound in US yields in recent sessions. To close the gap with the earlier November break lower in the pair we need to get back to the 15725 region, which is also near the 20-day EMA. On the downside, the 50-day EMA is back near 15607.
• The SGD NEER (per Goldman Sachs estimates) is marginally firmer this morning, the measure sits well within recent ranges. We sit ~0.4% below the top of the band. USD/SGD firmed yesterday as US Tsy Yields ticked higher, the latest 30-Year auction was poorly received by the market as the auction tailed, and pushed above $1.36 handle in early trade today.
• The Ringgit has been pressured in early dealing on Friday, Thursday's uptick in US Tsy Yields is weighing. USD/MYR sits at touch above the 4.72 handle and has risen ~0.6%. The pair has erased all its post-NFP losses. Bulls focus on the 20-Day EMA (4.7248) which opens the 4.80 handle. On the downside bears look to break the 4.70 handle to target the 200-Day EMA (4.5999).
• USD/THB gaped higher at the open. The pair got above 35.80, but now sits slightly lower, last at 35.78. This is 0.60% weaker in baht terms relative to yesterday's closing levels, as the currency plays catch up to the firmer USD trend. These moves have pushed us back above the 100-day EMA (35.605), while the 20 and 50 day sit above 35.90. Recent lows rest just under 35.40. Baht weakness is in line with the recovery in US yields. The US-TH 2yr government bond yield differential is back to +250bps, against recent lows around +230bps. Note PM Srettha we announce details of the digital wallet policy at 2pm local time today.