Most USD/Asia Pairs Lower, CNH & The High Yielders Lag

USD/Asia pairs are mostly lower, although CNH remains on the sidelines. Regional equity sentiment has been positive for the most part, led by South Korea. The won and THB have been the outperformers. Still to come today is the Taiwan trade figures for September. Tomorrow, we have South Korea bank lending to households, along with India IP and CPI prints due. Malaysia IP growth is also out.

• USD/CNH has held relatively steady, maintaining a narrow range during Wednesday trade to date. The pair was last near 7.2900, slightly above NY closing levels from Tuesday. he generally firmer equity backdrop isn't aiding sentiment today, although mainland equities are only a touch above recent lows. The latest insights from the MNI policy team suggests headwinds around the China economic backdrop, coupled with limited fiscal, monetary policy room (see this link).
• 1 month USD/KRW has broken lower, last near 1336, close to lows for the session. Earlier data showed a healthy goods trade surplus, along with signs of a further recovery in export demand. Local equities (Kospi +2.3%) have been buoyed by better Samsung earnings. Offshore investors have bought $133.1mn of local shares so far today.
• USD/HKD sits lower, last just under 7.8180. Lows today came in at 7.8159, while a spike above 7.8200 drew selling interest. A continued move lower could see September lows close to 7.8140 targeted. The pair is sub all its key EMAS, which remain clustered back near 7.8300. US-HK yield differentials have rolled over modestly. The 3 month spread is back to +26bps, which is still above late September lows near +14bps, but the broader move lower in yields, softer USD backdrop, have no doubt aided HKD.
• Spot USD/TWD has continued to track lower, last under 32.10, amid an improved mood for tech equity related sentiment. Later September trade data prints, which is expected to show better y/y momentum for exports, albeit still in negative territory.
• USD/IDR sits off recent highs. The pair last near 15700, around 0.25% stronger in IDR terms for the session so far. Yesterday's high was 15740, close to late 2022 highs. The 20-day EMA still sits lower at 15525, so unlike elsewhere in the region, the pair remains some distance away from a downside test of this support level. IDR remains the worst performer in Asian FX month to date, down 1.53% against the USD.
• The Rupee has opened dealing a touch firmer, however ranges for USD/INR remain narrow as the pair continues to consolidate above the 83.20 handle. A reminder that the data docket is empty today. The next release of note is tomorrow September CPI print, inflation is expected to tick lower to 5.40% Y/Y.
• USD/PHP sits back at 56.74, around 0.22% firmer in PHP terms versus yesterday's close. Like for some other parts of the region, the pair is testing downside support at the 20-day EMA. Still, for USD/PHP we remain well within recent ranges. Lows this month have been marked near 56.50, while resistance at 57.00 remains in place on the topside. BSP Governor Remolona has spoken today, and stated the central bank can't say that they are done with monetary tightening, while a 25bps hike won't be ruled out (as upside risks to inflation have materialized).
• The SGD NEER (per Goldman Sachs estimates) is little changed in early dealing on Wednesday and remains well within recent ranges. The measure sits ~0.5% below the top of the band. USD/SGD has held below the 20-Day EMA ($1.3654) after breaking the measure yesterday, improving sentiment through yesterday's session saw broad based pressure on the greenback.
• USD/THB continues to track lower, last near 36.42, +0.90 stronger in baht terms. We are through the 20-day EMA downside support point. Aiding sentiment has been a pick up in equity sentiment, the SET up +1% so far today. The BoT mins pointed to policy settings being at neutral.