USD Dominates

USD/Asia pairs are higher across the board today. Notably, USD/CNH has rebounded, pushing back to 6.8100. The won has also weakened to multi-week lows (1320). INR and IDR are also off, while PHP is steady as the market awaits a the BSP meeting outcome (50bps hike expected).

• CNH: USD/CNH has rebounded today. Currently sitting close to 6.8100, +0.20% on NY closing levels. Much like yesterday's session, where the dip in USD/CNH was difficult to explain from a cross asset perspective, the same applies today in terms of the bounce. Onshore equities are weaker, as is the case for much of the rest of the region. Local yields have ticked lower, but not as large as US moves. If USD/CNH keeps extending up, the focus will be highs from Monday's session, close to 6.8200.
• KRW: The won has slumped today, falling past 1320 in USD/KRW terms, before steadying. Onshore equities are lower by 0.35%. Broader risk appetite is weaker. We will also keep an eye out for South Korean rhetoric around FX levels.
• INR: Spot USD/INR has rebounded, back to 79.67, +0.30% on yesterday's closing levels. The 1 month NDF is around 79.90, close to the 80.00 level, so RBI intervention could be a risk. The domestic equity rally has stalled, at least in the first bit of onshore trade today. Local bourses are off by 0.2%.
• PHP: The PHP is relatively steady, with USD/PHP finding selling interest above 55.90. Hence the peso has outperformed the rest of the Asia complex today. The market awaits the BSP decision ,due out soon. The consensus is for a 50bps hike, in line with our expectation.
• IDR: USD/IDR has continued to climb today. The pair is up a further 0.50% in spot terms to 14841, while the 50-day MA comes in at 14878. Risk aversion creeping back into regional equities is not helping, even if Indonesian stocks are flat on the day. The BI Governor also came across the wires with dovish comments, stating the central bank is no rush to raise rates, and that rates don't need to be raised with the removal of energy subsidies. Note the next decision from the BI is on Tuesday the 23rd of August.