CNH & KRW Higher, INR Lags

USD/Asia pairs are lower today, amidst broad USD weakness and positive spill over from CNH and KRW gains. INR is the main outlier on the negative side, where rebounding oil prices are weighing.

• CNH: USD/CNH dipped sharply following the much stronger than expected CNY fixing (firmest outcome since early 2020, relative to expectations). We got towards the low 6.8515/20 region before rebounding. Moves above 6.8600 have drawn selling interest though and we are now threatening to break sub 6.8500 as we approach the London cross-over. Today's fix comes after the FX regulatory warned against shorting the yuan overnight, so clearly the degree of concern around FX depreciation pressures has risen.
• KRW: Spot USD/KRW has mostly tracked lower. Onshore equities are around 1% higher for the Kospi, which has helped. The BoK hiked by 25bps as expected and is also focused more on the exchange rate and its influence on the domestic economy. This echoes comments from other officials around FX levels in recent session. Dips below 1334 were supported in the 1 month NDF, we were last at 1335.80.
• INR: The rupee is underperforming the broader FX trend today. Spot USD/INR is above 79.80, while the 1 month USD/INR NDF has crept back above 80.05. Higher oil prices, with Brent continuing to recover, is weighing at the margin.
• IDR: Spot USD/IDR is lower by -19.5figs to 14828, in line with the regional trend. The gov't said it will submit the findings from its assessment on subsidised fuel price hikes to President Widodo this week. It will then announce the decision on price increase, which will be closely watched due to the ramifications for inflation dynamics.
• PHP: The Philippine peso has found poise as domestic FX and bond markets re-open after a one-day pause caused by adverse weather conditions. Spot USD/PHP last deals -0.075 at PHP56.015, with bears looking for losses past the 50-DMA, which kicks in at PHP55.523.
• THB: The baht outperforms its peers in emerging Asia, shrugging off the suspension of PM Prayuth until the Constitutional Court resolves a dispute on his term limit. Spot USD/THB trades -0.16 at THB35.89. From a technical standpoint, bears look for a dip through the 50-DMA (THB35.828) towards Aug 11 low of THB35.160.