Broad Based USD/Asia Gains

USD/Asia pairs are higher across the board, amid broad based USD gains. USD/KRW has spiked to fresh cyclical highs, while USD/CNH is edging closer to a test of the previous YTD high (6.8380).

• CNH: USD/CNH has broken to fresh weekly highs through 6.8200. We have stopped short of a test above 6.8300, but the near term focus will be on test of previous YTD highs of 6.8380. Vol markets remain fairly calm though, so the market isn't expecting fireworks at this stage. Onshore equities have been mixed, while the bias for bond yields remains skewed to the downside. The 2yr is back to 2.05%, but isn't seeing a sharp move lower.
• KRW: Spot USD/KRW hit fresh cyclical highs in early trade, getting close to 1329 before selling interest emerged. The pair is around +0.50% above yesterday's close. Onshore equities are weaker, -0.50% for the Kospi and -1.10% for the Kosdaq.
• INR: Spot USD/INR has nudged higher in the first part of trading, sitting close to 79.75. This is close to fresh highs for the month, although remains sub the 80.00 level. The 1 month USD/INR NDF has tried to push above this level, but hasn't been able to do so convincingly yet. The overnight rebound in crude prices isn't helping.
• IDR: USD/IDR opened higher and has generally held these gains, last at +31 figs to 14864. Q2 current account data was close to expectations ($3.9bn versus $4.5bn expected), and 1.1% of GDP. The authorities are considering a tax on nickel exports this year, which has weighed on sentiment at the margin. President Jokowi has also stated he supports a change in the BI mandate, which would include supporting jobs growth.
• PHP: USD/PHP has drifted higher, in line with the broader USD trend. The pair did find selling resistance above 56.00 though, last at 55.955. BSP Governor Medalla stated inflation expectations should be anchored following a cumulative 175bps in hikes. Further hikes are likely to be in 25bps increments. However, the central bank will delay plans to cut the RRR.
• THB: USD/THB is flirting with a break back above the 50-day MA (35.71), with current spot at 35.73 (+0.34% for the session). The Thai PM stated that an emergency decree is still necessary to contain the spread of Covid. The measure is expected to expire end-September though. Thai equities are down modestly, but net equity inflow momentum from offshore investors has been positive this week. We have had +$636.7mn in net inflows, just over half the sum seen in August to date.