Well Behaved Despite Heightened Geopolitical Tensions & Lower Equities

CNH, KRW and TWD have been well behaved today despite negative equity sentiment and heightened tensions between US-China ahead of US House Speaker Pelosi's Taiwan visit. INR has continued to rebound, up a further 0.6% today.

• CNH: USD/CNH tracked above overnight highs in early trade. We got just above 6.7950 before selling interest emerged. The pair dipped as far back as 6.7750 but we are now back above 6.7800. Onshore equities are noticeably weaker amid on-going US-China tensions, as we the market awaits the outcome of Pelosi's trip to Taiwan. The fixing bias is slightly skewed towards weaker CNY levels.
• KRW: USD/KRW has been range bound, finding selling interest close to 1310 in early trade. Onshore equities are lower (-0.55%) but are outperforming the China and Taiwan trends. Earlier, Korean CPI came in as expected in YoY terms at 6.3%.
• TWD: Spot USD/TWD has pushed above 30.00, but is only +0.20% above yesterday's closing levels. The 1 month NDF is back to the low 30.00 region, around 0.45% below NY closing levels. Taiwan equities are weaker, but losses are sub 2% at this stage. China has reportedly curbed food imports from Taiwan effective from mid-night, in an apparent retaliation for Pelosi's trip.
• INR: USD/INR is down sharply today, dipping a further 0.60% to 78.57. The pair is now below the 50 day MA (78.70) for the first time since early May, although this proved to be a false break. Onshore equities are lower today, but not as much as elsewhere in the region.
• IDR: USD/IDR 1-month NDF sits +21 figs at IDR14,879 after finding support in its 50-DMA over the past two days. Inflation figures released out of Indonesia on Monday are unlikely to force the central bank to front-load tightening. Core CPI accelerated to +2.86% Y/Y but matched expectations and stayed below the mid-point of the target range. Following the release, Governor Warjiyo noted that underlying price pressures are "still low," with the central bank seeing "no need to quickly raise interest rates."