Most USD/Asia Pairs Higher, PHP Outperforms, Labor Day Holidays Tomorrow

Outside of PHP, most Asian currencies are tracking weaker against the USD at this stage. USD/CNY spot is back above 7.2400, continuing to be supported on dips. USD gains are fairly modest overall, but in line with G10 FX losses against the greenback. Tomorrow onshore China markets are closed for the start of a 3-day break. A number of other markets are closed around the region including Hong Kong and Singapore. Note we still get South Korea April trade figures (even with local markets closed).

• USD/CNH is testing back above the 50-day EMA, the pair last near 7.2535. Onshore spot has pushed higher since the open, last around 7.2430, just shy of recent highs. The CNY fixing was steady, but the onshore bias remains to buy USD dips. Weaker China equity sentiment has likely hurt at the margins, while PMI data was mixed. Services activity has pulled back, but remains in expansion territory, while manufacturing is showing some resilience.
• 1 month USD/KRW sits marginally higher, last near 1376.6, around 0.25% weaker in KRW terms. Overall, we continue to track recent ranges, We had weaker than expected IP data earlier, with downside risks for Q1 GDP revisions. The Kospi is higher, but away from best levels.
• USD/PHP is lower, last near 57.55, around 0.25% stronger in PHP terms. The peso is bucking the broader stronger dollar trend (BBDXY +0.20%) so far today. The pair has progressively moved away from recent highs near 58.00.• Recall last week we had comments from the BSP Governor that they were prepared to intervene in FX markets. This hinted that the 58.00 level was a potential short term line in the sand. This has potentially curbed further upside interest in the pair. Note we still sit away from support points, with the 20-day EMA back around the 57.13 level. The IMF noted in commentary today the local currency could face pressure from interest rate differentials.
• USD/THB holds above 37.00, displaying lower volatility in recent sessions. We had March IP fall -5.13% y/y, which was below expectations and continues the recent run of generally softer local economic indicators. Still to come is March BoP and trade balance figures.
• Spot USD/IDR continues to gravitate higher, the pair last near 16270. This is just short of recent cyclical highs of 16288. Dividend related outflows may be continuing to weigh. The general backdrop for offshore portfolio flows also remains negative. Watch for BI intervention if we threaten recent highs.