Rebound Doesn't Have Much Follow Through

Follow through USD selling has been somewhat limited today. The more cautious tone to regional equities, coupled with USD gains against the majors, have emerged as headwinds as the session progressed. Indian Q4 GDP is due later. Tomorrow the focus is on China PMI prints and South Korean Feb trade figures. PMI prints will be out elsewhere in the region. Indonesia CPI is also due.

• USD/CNH got to a low close to 6.9450, but we have since rebounded, now back above 6.9600. The CNH is slightly weaker versus NY closing levels. The CNY fixing was again close to neutral, as we highlighted today, this is at odds with the recent round of yuan weakness, at least from an historical standpoint. Tomorrow, the market is forecasting improvement across the manufacturing and services PMI prints.
• 1 month USD/KRW tried to break towards 1310 in early trade but had little follow through. We are now through Monday session highs, approaching 1325. The authorities stated they would monitor FX supply and demand dynamics.
• USD/SGD is trying to push above 1.3500, but is meeting some resistance so far. Bulls look to sustain a break of $1.35 to target the 200-Day EMA ($1.3637). Bears first look to break the 20-day EMA at $1.3359 to turn the tide. The SGD NEER is down a touch. Figures released by MAS today should that in January M2 Money Supply rose 1.8% YoY whilst M1 Money Supply Fell -12.8% YoY. The figures also showed total loans/advances continue to slow with the total falling 1.9% in the month. We were at +6.7% y/y in August last year.
• USD/IDR has backed away from the 15300 level, last tracking close to 15240, around 0.20% firmer in IDR terms versus yesterday's close. The pair remains wedged between the 50-day (15279) and 200-day (15158) MAs. Tomorrow the PMI and CPI data prints for Feb are due. The market expects an uptick in y/y CPI to 5.42% (form 5.28%), but core is expected to remain benign at 3.24% y/y (versus 3.27% prior). The BI reiterated that it doesn't expect to hike rates again and that it has been intervening to defend the rupiah.
• The BoT Governor stated the central bank is committed to the policy normalization path and is watching for stronger core inflation pressures (note the next CPI prints on March 7). The Finance Minister also added it was unlikely the BoT would be too aggressive in terms of the rate hike cycle. USD/THB tried to move towards 35.00 in early trade, but saw little follow through, the pair last at 35.15. Still to come is Jan trade figures.