Mixed Performances On Divergent Drivers

Asian FX has been mixed, with firmer equity sentiment but a slightly stronger USD against the majors, providing offsetting influences for the region.

• CNH: USD/CNH has spent much of the day with a firmer trend, we currently sit around 6.6750, versus opening levels closer to 6.6600. The fixing bias remains skewed towards limiting CNY depreciation pressures, while equity market sentiment has been better for both China and HK markets. The USD is slightly higher against EUR and JPY, which has likely weighed.
• KRW: 1 month USD/KRW pushed back to 1265 in early trade, as North Korea ramped up missile tests and overnight tech equity weakness weighed. However, we are back to a 1263 handle, as equity market sentiment has recovered. The Kospi is up 0.80%, but net equity outflows have still been evident today (-$95mn).
• IDR: The rupiah is slightly firmer, with USD/IDR drifting down to 14640. This comes after Indonesia chose to stand pat on the 7-Day Reverse Repo Rate on Tuesday, while raising the reserve requirement rate.
• SGD: USD/SGD has edged up from the low 1.3700 region (last 1.3730), as the USD has recovered some ground against the majors. The Ministry of Trade & Industry reaffirmed its +3%-5% Y/Y growth forecast for this year, but said the actual outturn will likely be in the lower half of this range and warned that "the external demand outlook for the Singapore economy has weakened compared to three months ago."
• MYR: USD/MYR is down a touch to 4.3920. The government will not implement restrictions on cooking oil exports amid ample domestic supplies, Plantation Industries and Commodities Minister Zuraida Kamaruddin told Bloomberg on Tuesday.
• THB: USD/THB is slightly higher, pushing up to 34.20, likely following the USD lead against EUR and JPY. Thai FinMin Arkhom said the government is waiting for the "appropriate time" to impose a tax on stocks trading. He added that the economic recovery is still progressing at a slow pace and the government wants to see stronger rebound. The Cabinet gave a nod to the extension of hotel subsidy scheme to assist the ailing tourism sector until September. The previous expiry date of the programme was May 31.