Weaker Equities Weigh

Asian FX has generally moved away from recent highs today, as regional equities have traded weaker as the session progressed. Lower US futures have outweighed further China fiscal support measures.

• CNH: The USD/CNY came in below expectations again, but only modestly. USD/CNH has crept back above 6.6700, with the currency losing some impetus as there has been no follow up to Biden's comments on reviewing tariffs. China equities are off by than 1%, with modest fresh fiscal stimulus unable to aid sentiment. UBS and J.P. Morgan downgraded their 2022 GDP forecasts for China.
• KRW: 1 month USD/KRW is +0.40% above the NY close, putting us back above 1264 . This is in line with regional equity weakness, with Kospi losses rising as the session progressed. Net equity outflows accelerated today to -$238.5mn. Earlier, consumer sentiment dipped to 102.6 from 103.8 last month.
• IDR: USD/IDR 1 month is 0.25% higher, tracking back to 14670. The main focus is on the BI decision due later today. No change is expected, but tightening risks are growing (see this link).
• SGD: USD/SGD is higher but only modestly above NY closing levels. We remain sub 1.3750, with SGD outperforming G10 weakness against the USD (except for JPY). We noted yesterday the SGD NEER continues to lag Singapore inflation trends.
• INR: Spot USD/INR is up slightly in early trade, pushing up towards the 77.60 level. Watch intervention risk above 77.70 if seen. Local bond yields have moved away from yesterday's highs though .