Resilient Start To The Week

For the most part, Asian FX has outperformed stronger USD sentiment seen against the majors. Weaker equities also haven't impact sentiment a great deal, although weakness has been far from uniform in the equity space.

• CNH: USD/CNH has drifted lower today, but only modestly. The pair is back sub 6.7600, despite softness in onshore equities. The fixing was also modestly weaker than expected. We have seen CNH outperforming broader USD strength elsewhere, although these trends have reversed somewhat through the afternoon session.
• KRW: USD/KRW is lower. Spot is down 0.30% from last week's close to be tracking just under 1309. Local equities are higher by +0.75% at this stage, which is helping, as is lower USD/CNH levels. On the downside support has been evident recently at 1305/06, so that level will be watched.
• TWD: USD/TWD has drifted a little lower in spot terms, last at 29.90, little fazed by geopolitics from the weekend. The FT reported that "China has issued stark private warnings to the Biden administration about the upcoming trip to Taiwan by Nancy Pelosi," which were "significantly stronger than the threats that Beijing has made in the past." Senior U.S. security officials are known to be opposing the trip amid concerns that it could aggravate tensions with Beijing.
• INR: USD/INR is down slightly from last week's closing levels. Last at 79.83. Onshore equities are down slightly in early trade, off by 0.4%. RBI Governor Das's defence of the rupee last Friday may be working to calm market sentiment to a degree. FX reserve data released on Friday also showed a sharp drop in FX reserves to $572.7bn for mid July (a $7.5bn drop).
• THB: Spot USD/THB is around 0.15% higher versus last week's close, currently sitting at 36.75. PM Prayuth and 10 Cabinet ministers survived co confidence votes in parliament on Saturday. This gives the government some breathing space, with no more censure debates planned ahead of the general election that should take place early in 2023.
• PHP: The peso is slightly firmer. USD/PHP is back to 56.23. President Marcos is preparing to deliver his first State of the Nation Address later today. Ahead of the key policy address, Marcos announced his decision to keep Rosalia de Leon as the Treasurer and formally appoint Raphael Lotilla as Energy Secretary.