INR Rallies On Election Exit Polls, KRW & TWD Buoyed By Equities

USD/Asia pairs are mostly lower, albeit to varying degrees. KRW, INR and TWD are the strongest performers, with generally steadier trends elsewhere. The rupee has been buoyed by strong exit polls for PM incumbent Modi, but the RBI is unlikely to allow sharp spot gains. Tomorrow, we have South Korea CPI for May. Thailand's PMI is out as well, along with Malaysia's.

• USD/CNH has tracked within recent ranges, the pair seeing support on a dip sub 7.2550. We last tracked near 7.2625, little changed for the session. Onshore equities are slightly in the red underperforming the better tone seen elsewhere, particularly in Hong Kong. The Caixin manufacturing PMI held up well, particularly compared to last Friday's official result, but hasn't aided FX sentiment meaningfully.
• 1 month USD/KRW sits away from late May highs (near 1385). We were last near 1374 around 0.50% stronger in won terms, slightly up from session lows. Sentiment is being aided by a better regional equity tone, along with strong local gains (the Kospi is up nearly 1.9%). Onshore sentiment has been boosted after President Yoon stated an offshore oil and gas discovery would be developed. PMI prints for North East Asia rose, with South Korea seeing the biggest improvement relative to the April outcome.
• USD/TWD has followed a similar trajectory, albeit with a lower beta compared to KRW moves. Spot was last back to 32.30/35, around 0.25% stronger in TWD terms. The Taiex is up around 1.8%.
• USD/INR gapped under 83.00 not long after the onshore open, as sentiment was buoyed by strong exit polls for PM incumbent Modi from the recent general election. We found support around the 200-day EMA though and sit back near 83.05 in recent dealings. Modi is seen as a positive for the growth backdrop from a policy continuity/reform perspective. Still, the rough sell-side consensus is that we are unlikely to see any meaningful run of spot INR gains, as the RBI is likely to maintain broader stability in FX.
• USD/IDR is lower, but remains within recent ranges. The pair around 16225/30 in latest dealings. The May CPI was mixed, with headline softer than expected, but core ticking up to 1.93% y/y (from 1.82%).