Little Reprieve For USD/Asia Pairs, State Banks Reportedly Curbing Onshore CNY Weakness

Asia FX, for the most part, has not enjoyed the rally some of the majors have seen against the USD at the start of this week. Most USD/Asia pairs are higher. Spot USD/CNH and 1 month USD/KRW are the exceptions, although both pairs have been supported on dips. Tomorrow the focus is likely to rest on China's Q3 GDP print, along with the September monthly round of activity data (see this link for more details).

• USD/CNH has tracked within recent ranges. We got above 7.2200 post the CNY fixing, which was a record lean against depreciation pressures but did little to boost sentiment. We dipped back sub 7.2000 but buying interest emerged. Negative covid headlines are not helping sentiment this afternoon around lockdowns in a tech hub. It was also reported this afternoon, across the wires, state banks had been selling USDs in the onshore spot market. This looked to be aimed at curbing a fresh break above the 7.2000 level.
• Spot USD/KRW got above 1440 in early trade but found selling interest around this level. Onshore equities have outperformed, which has helped, although only at the margin. Dips sub 1435 were supported. The pair was last at 1437.
• USD/TWD breached 32.00, fresh highs back to early 2017. Onshore equities slumped, in line with tech weakness in US markets on Friday. The 1month NDF is close to 32.10.
• USD/IDR is higher today, spot +57.5 figs to 15480, which is fresh highs back to early 2020. Bulls look to take out the 61.8% retracement of the 2020 sell-off/Apr 23, 2020 high of IDR15,574/15,598. The September trade surplus was close to expectations, just under $5bn, but both export and import growth surprised on the downside. Bank Indonesia will deliver its monetary policy decision this Thursday. Most (19/29) analysts surveyed by Bloomberg expect a 50bp hike to the 7-Day Reverse Repo Rate, while the rest have pencilled in a smaller 25bp rate rise.
• The 59.00 figure level for USD/PHP remains a key line in the sand as the pair struggles to penetrate this all-time high amid Bangko Sentral's activity in the market. Officials reiterated that they keep watching peso moves. FinSec/ex-BSP Gov Diokno said the central bank is monitoring FX transactions to detect speculative activity after implementing "measures to moderate sudden movements in the peso."
• USD/THB is above 38.20, not too far from recent cyclical highs (38.45 in late September). BoT commentary didn't suggest a great deal of alarm in terms of weak FX levels. It stated it stands ready to manage excessive volatility and that the country should return to a current account surplus next year.