KRW & THB Rally, USD/CNH Steady, BoT Decision Due Tomorrow

USD/Asia Moves have mostly been skewed to the downside today. KRW and THB have been the strongest performers, while MYR has also gained. USD/CNH's beta to overall USD moves has become more muted in recent sessions. Still to come today is Taiwan Q3 GDP. Tomorrow, we have South Korea business sentiment early. Later on, focus will be on the BoT decision, although no change is expected.

• USD/CNH's beta to overall USD moves has been fairly muted. We had a lower USD/CNY fix, but dips in USD/CNH towards 7.1500 have been supported. We currently track near 7.1575 slightly firmer in CNH terms for the session. Onshore equities are around flat, while HK markets have been weaker in the first part of trade. PBoC Governor Pan spoke HK, he played down the risks from real estate, stating spill over to the financial system was limited. The economy should achieve its growth target in 2023 as well, while risks from local government debt levels were also contained at an aggregate level.
• 1 month USD/KRW has tracked lower in the first part of Tuesday trade. We were last near 1291, (+0.40% higher in won terms), with earlier lows at 1288.25. Won bulls will target a test of Nov 21 lows just under 1282. Positive spillover has been evident from a firmer yen backdrop, while broader USD index losses also continue (BBDXY down a further 0.12%). The firmer local equity backdrop has also helped, the Kospi rising 0.70% and putting the index back above 2500. We haven't been above to sustain gains above this level in recent weeks, so that will be a watch point.
• The Rupee has opened dealing little changed from Friday's closing levels in a muted start to Tuesday's session. Onshore participants are digesting the downtick in US Tsy Yields on Monday, which has moderated a touch in Asia today, and further pressure on Oil. A reminder that local markets were closed yesterday for the observance of a national holiday. The local docket is empty until Thursday when Q3 GDP crosses. A print of 6.9% Y/Y is expected, the prior read was 8.0%. Also due on Thursday is the October Fiscal Deficit. On Friday we have November S&P Global Mfg PMI.
• The SGD NEER (per Goldman Sachs estimates) is little changed this morning, we remain a touch off recent cycle highs. The measure sits ~0.3% below the top of the band. USD/SGD fell ~0.4% on Monday breaching the $1.34 handle as lower US Tsy Yields weighed on the pair. We sit a touch above the lows from 21 Nov when a 3 month low was printed. A reminder that the docket is light this week with just October Money Supply due on Thursday.
• The Ringgit has ticked higher as onshore participants digest yesterday's downtick in US Tsy Yields which has moderated a touch this morning. USD/MYR is ~0.3% lower today, last printing at 4.6660/90. A reminder that yesterday Malaysia’s lower house of Parliament voted in favour of the government’s 2024 spending plan, it will now be presented to the Senate.
• USD/THB sits at session lows, near 34.90, levels we haven't been at since the start of Sep. Baht has rallied nearly 0.60%, only bettered by KRW today. As we noted yesterday, firmer gold prices will be aiding sentiment at the margin, as this could lead to higher exports. Yesterday's surprise trade deficit hasn't had a lasting negative impact on sentiment. BoT Governor Sethaput spoke on a panel session in Hong Kong earlier. He didn't give much away on monetary policy given the proximity of tomorrow's policy meeting (no change is expected). One area of concern is that China tourists weren't coming back, with spending also down on prior outcomes the Governor noted. This is definitely something that is on the radar for the authorities, with steps being considered to boost inflows in 2024.
• Philippine markets have returned today. The early impetus has been for USD/PHP to gravitate higher, but we now sit close to unchanged from last Friday levels, last at 55.41. The Philippines Finance Secretary Diokno said over the weekend that the likely USD/PHP range was 53-57 over the medium term. Structural inflows and ample FX reserves support this backdrop (BBG).