CNH Steadies

CNH has consolidated today after yesterday's -1.15% dip, the largest daily fall since 2019, when the currency fell through 7.00. This, along with a modestly better equity tone for the region, has helped FX sentiment stabilize elsewhere.

• CNH: USD/CNH edged down slightly today. The pair is around 0.2% sub NY closing levels. Dips below 6.8000 have been supported (last at 6.8030), but we have moved away from a test above 6.8200 for now. Onshore equity sentiment has been better, while aggregate gains are limited, property companies are up on a report a state backed insurer will guarantee onshore bonds issues by some developers. The CNY fix also came in a touch firmer than expected.
• KRW: 1 month USD/KRW is back below 1310, stepping away from a test of 1315/16 for now. Onshore equities are grinding higher, giving some support.
• IDR: USD/IDR 1-month NDF last +12 figs at IDR14,772. Bulls look to a move through Aug 5 high of IDR14,990, while bears eye Aug 12 low of IDR14,14,654 for initial support. Indonesia's 5-year CDS premium is hovering just above two-month lows printed last week. It now sits at around 98bp. President Jokowi has stated that Indonesia's economic fundamentals remain sound in his annual budget speech today.
• PHP: Spot USD/PHP continues to gravitate higher, with spot back close to 56.00, around 0.25% firmer through the session. Most analysts expect Bangko Sentral ng Pilipinas to raise the key policy rate by 50bp this week as the Monetary Board is set to decide between the expected outcome and a more modest 25bp hike.
• THB: Spot USD/THB last deals -0.12 figs at 35.383. The BoT Gov told TNN that Q2 GDP showed economic recovery has started, even as the print was lower than expected, mostly due to inventory and private investment. However, tourism performed better than anticipated. Global funds bought a net $162.7mn in Thai equities on Monday, which was the largest net inflow since the last day of May. The recent uptick in equity inflows coincides with a move higher in the benchmark SET Index.