Most USD/Asia Pairs Higher, CNH Outperforms

USD/Asia pairs are mostly higher, in line with a recovery in the USD backdrop and weaker regional equity sentiment. CNH has outperformed (last under 7.1500), with RTRS reporting state bank support for the onshore yuan. The better Caixin services PMI didn't shift sentiment. KRW and IDR have underperformed. Looking to tomorrow, we just have Taiwan CPI in a fairly light data day for the region.

• USD/CNH is off session highs, last under 7.1500, despite a weaker equity backdrop. The CSI 300 continues to make fresh lows. The better than expected Caixin services PMI only benefited FX sentiment briefly. Reuters headlines crossed indicating that state banks are selling USD/CNY onshore (via swaps), with the aim of encouraging exporters to convert earnings proceeds into the yuan before year end.
• 1 month USD/KRW has mostly been on the front foot in Tuesday Asia Pac dealings. We were last near 1311/12, above Monday session highs. Broader risk aversion has aided the USD, with regional equities underperforming. The Kospi is off 0.70%. Earlier we had slightly weaker than expected CPI for Nov, but the central bank still sounded cautious on the outlook.
• USD/IDR sits back near 15495 in latest dealings. This is off session highs (15517) but is still nearly 0.25% weaker in IDR terms versus Monday closing levels. After the THB and KRW, IDR is the weakest performer in spot terms within the Asia Pac region. We remain within recent ranges for the pair, with recent dips sub 15400 not sustained. On the topside the 20 and 50-day EMAs are in the 15540-60 range. Note the 100-day EMA is back at 15463.• A weaker IDR is in line with a firmer US yield backdrop. The US real 10yr yield climbing back to 2.07% on Monday against recent lows of 2.0% from the end of last week.
• The Ringgit has softened a touch in early trade this morning as onshore participants digested Monday's rise in US Tsy Yields, losses have been marginally pared and we do remain well within recent ranges. USD/MYR sits at 4.6640/60, ~0.2% higher today. A 4.63/70 range has persisted for the most part since early November.
• The Rupee has opened dealing a touch below yesterday’s closing levels however ranges are narrow. Onshore participants are digesting yesterday's uptick in US Tsy Yields as 2024 rate cut expectations were wound back. USD/INR prints at 83.36/38. On the wires today we had November S&P Global Services and Composite PMIs, Services PMI fell to 56.9 from 58.4 and Compostite PMI fell from 58.4 to 57.4.
• The SGD NEER (per Goldman Sachs estimates) is little changed this morning, we remain a touch off recent cycle highs and well within recent ranges. The measure sits ~0.3% below the top of the band. USD/SGD is holding below the $1.34 handle, the pair firmed ~0.3% yesterday as US Tsy Yields ticked higher. Participants wound back 2024 rate cut expectations which supported the USD. In early dealing on Tuesday we sit at $1.3380/85. In November S&P Global Whole Economy PMI rose to 55.8 from 53.7. This was the highest print since November 2022 and marks the ninth consecutive month of expansion. Retail Sales fell 0.1% Y/Y in October, a rise of 0.2% had been expected.
• PHP has outperformed today, the pair back near 55.34, versus earlier highs of 55.43. Nov CPI data was weaker than expected, which should see the BSP remain on hold next week, although BSP still sees upside inflation risks.