Most USD/Asia Pairs Move Off Recent Highs

Most USD/Asia pairs have moved off their recent highs, led by the sharp drop in USD/CNH.

• CNH: USD/CNH has fallen sharply, down around 0.60% to the low 6.6700 region. The break of 6.7000 seemed to cause somewhat of an air pocket, as there were no major catalysts for the break lower. A Shanghai Securities article suggested 'extraordinary' stimulus measures are planned to combat a slowdown in investment, helped equity sentiment. Prospects of a tariff announcement from US President Biden also helped, although both of these news items were known prior to the break lower in USD/CNH.
• KRW: Spot USD/KRW climbed above 1295 briefly, fresh cyclical highs, as Korean equities tanked. The Kospi opened higher but subsequent slid more than 2.50%. USD/KRW came off its highs, as USD/CNH fell, while the South Korean Finance also warned against one-sided FX moves. Spot USD/KRW is back to 1290.
• INR: USD/INR is back below 78.00 for the first time in a number of sessions. We currently sit at 77.91. Indian bond yields have printed lower, as lower prices aid onshore sentiment. Brent crude remains around recent lows at $113/bbl.
• PHP: USD/PHP surged above 54.00 in early trade before running into resistance. We are back at 53.95 now. Comments from incoming BSP Governor Medalla around the BSP's gradualist approach to rate hikes and not having to follow the Fed in lockstep weighed on the peso. A 25bps hike is expected at this Thursday's BSP meeting.
• SGD: USD/SGD has slipped 0.35% to 1.3860, in line with broader USD weakness. The SGD NEER is sitting just off recent highs. This Thursday the focus will be on inflation data, particularly to gauge MAS tightening risks ahead of the October policy meeting.
• IDR: USD/IDR has remained around recent highs of just under 14840, in a quiet session overall. This Thursday the BI decision is due, with the market consensus expecting rates to remain at 3.50%, pressure is growing on the BI to act though, as real yields slip into negative territory and the yield differential with the US erodes. Also note, most of Indonesia's pandemic-era fiscal policy incentives ease at the end of this month.