Fresh Highs Again In USD/CNH, Parts Of SEA FX outperform

USD/CNH has once again made fresh highs, pushing above the 7.1200 handle. This has spilled over to the rest of the region, although parts of SEA FX have outperformed. Weaker China PMIs have weighed on broader risk appetite. Still to come is the BoT decision, with a +25bps hike expected, while later on India Q1 GDP is due. Tomorrow the Caixin manufacturing PMI prints in China, as well as South Korea May trade figures.

• The CNY fixing was again close to neutral, while the weaker PMIs suggest further easing calls are going to persist from the market. Price measures were noticeably weaker across the manufacturing and services PMIs. USD/CNH has moved above 7.1200 in its latest dealings. Onshore spot is above 7.1000. Focus is likely to rest on any late equity market recovery, with the CSI 300 down 1..1% at this stage.
• 1 month USD/KRW was weaker in early trade, but is back above 1320 now due to higher USD/CNH levels. Onshore equities have softened, the Kospi off 0.15%, but offshore investors have still added a further $218.7mn to local shares. Earlier data showed weakness in terms of IP and retail sales for Apr.
• USD/TWD 1 month has rebounded strongly, up over 0.60%, last near 30.70. The Taiwan equity rally has stalled. The simple 200-day MA is around the 30.75 level.
• USD/THB is weaker, last in the 34.70/75 region. USD/THB is 0.5% lower than Monday’s post-election high. The discussion on which party will take the House Speaker role will be conducted between just Move Forward and Pheu Thai. But there is a growing call amongst coalition parties that it should go to an experienced member and Pheu Thai leader Cholnan’s name is being increasingly mentioned. BoT is expected to hike 25bps later.
• USD/PHP has also edged away from recent highs, after getting close to fresh YTD highs. The pair was last in the 56.20/25 region.
• USD/IDR has breached the 15000 level, printing fresh highs back to early April. The pair was last at 14990/95. Lows from late March close to 15050 may be the next upside target. Also note the simple 100 day MA is just under 15100, the 50-day sits back near 14958. The softer commodity price backdrop is weighing, with palm oil prices continuing to make fresh lows (last MYR3400).