Most USD/Asia Pairs Higher, PHP Outperforms

USD/Asia pairs are higher, with a firmer dollar against the majors spilling over. Higher USD/JPY levels have likely biased the USD higher against NEA FX as well. PHP strength was the clear standout in bucking these trends. The Caixin PMI was weaker than expected but didn't have an immediate impact. PMI trends were mixed elsewhere, while South Korean export growth fell. Tomorrow, we get South Korean inflation, the BoT decision (+25bps expected), along with Singapore PMIs.

• USD/CNH spot has maintained a positive bias for much of today's session. We currently sit close to session highs, the pair last near 7.1730. Broader USD gains have weighed on CNH, particularly renewed yen weakness. The Caixin PMI was also notably softer than expected, although the initial market reaction was limited. Local equities are losing ground amid fresh headwinds for the property sub indices. The HSI and mainland indices have given up positive starts to track lower in latest dealings.
• 1 month USD/KRW today has met some resistance around the 1280 level, but we are still around 0.20% weaker in won terms versus NY closing levels on Monday (last near 1279). The 20-day EMA is very close to 1280, so this may be providing some resistance. A break above this level could see a move towards highs on July 21 (~1288.40) targeted. Won weakness is very much in line with softer CNH and JPY levels against the USD. USD/CNH is tracking above 7.1700, while USD/JPY is above 142.70, although this is below earlier highs. Earlier on the data front, we had slightly weaker than expected July export growth and a lower than forecast trade surplus. Some offset was provided by the rise in the manufacturing PMI though. This improvement was driven by export orders rising above the 50.0 point for the first time in 16 months.
• USD/PHP has backed away from late July highs. Spot sits in the 54.70/75 region currently, +0.30% firmer in PHP terms so far today. This is impressive given broadly stronger USD trends elsewhere. Recent highs in spot USD/PHP come in around the 54.90 region, which is also close to the 20-day EMA. Mid July lows in the pair were back near 54.30. One factor potentially boosting the PHP today is carry over from yesterday's chunky +$270.1mn net equity inflow. This was the largest daily inflow going back to late 2021.• Local equities are higher today, the PCOMP +0.50% and tracking higher for the first time in 4 sessions. Late yesterday the BSP stated July inflation likely eased further to between 4.1% to 4.9% (from the June pace of 5.4%). Note this data prints on August 4, this Friday (market consensus is +4.9% y/y).
• USD/IDR continues to track higher, the pair near 15120 currently., right on session highs. This is line with broader USD gains elsewhere in the region and in terms of the majors. Still, the currency was the second worst performer in July (TWD the worst). The pair is now back to mid-July levels. Highs last month were just above 15200. We are above all key EMAs (the nearest being the 200-day at 15042) but the simple 200-day MA sits higher at 15222. July CPI was close to expectations, headline y/y printing at 3.08%, while core eased to 2.43% (forecast 2.52% and 2.58% prior). The continued move lower in headline and core inflation pressures is unlikely to drive a near term easier BI policy backdrop. The central bank is mindful of IDR weakness, particularly with uncertainty hanging over the Fed outlook. It continues to look to manage FX through its policy of keeping export earnings onshore, with the new strategy kicking off today.
• The Rupee is marginally pressured in early dealing on Tuesday as broader greenback trends dominate flows, USD/INR is up ~0.1% consolidating gains above the 82 handle. In July USD/INR observed a narrow ~1.3% range with moves limited for the most part. The pair found support below 81.60, supply was seen above 82.50. India's fiscal deficit widened in June, to INR241,803 Crore from INR76,690 Crore in May. June's Eight Infrastructure Industries grew at 8.2% Y/Y in June, the prior was revised higher to 5.0%.
• The Ringgit had its largest monthly gain since November 2022, USD/MYR fell ~3.4% in July as the Ringgit marginally extended its post US CPI gains late in the month. Today broader USD trends are dominating flows as the greenback is firmer after a weaker than forecast China Caixin Mfg PMI print. USD/MYR is ~0.1%, last printing at 4.5100/40. S&P Global Mfg PMI ticked higher in July, the measure printed at 47.8 rising from 47.7 prior. Despite the uptick this is the twelve consecutive month of contraction. Looking ahead the domestic data docket is empty for the remainder of the week.
• The SGD NEER (per Goldman Sachs estimates) is little changed in early dealing, the measure is holding near cycle highs and sits ~0.3% below the top of the band. USD/SGD is firmer in early dealing as broader USD trends dominate flows. Gains have been capped by the 20-Day EMA in recent dealing, the pair last prints at $1.3310/20. The domestic docket is empty today, tomorrow the July Purchasing Managers Index and the Electronics Sector Index cross. There is no estimate for either print.