UISD/Asia Dips Supported, BNM Still To Come, No Change Expected

USD/Asia pairs are mostly higher, led by gains in USD/CNH, which has risen above 7.3300. There appears resistance to a move higher in USD/KRW towards 1340, but dips in the pair are still supported. In SEA PHP is outperforming, but this doesn't appear to be fundamentally driven. Tomorrow, we get Taiwan August trade figures, July BoP/current account data for South Korea and Philippines July trade data. Still to come today is the BNM decision, with no change expected.

• USD/CNH has risen to fresh highs, last above 7.3300 (highs for the session near 7.3340). Local equities are a headwind, down near 1% at this stage. We did have slightly better than expected August trade data, but this didn’t shift the sentiment needle. The USD/CNY fixing also remained close to record wides. USD/CNY spot has made fresh YTD highs above 7.3200, with state bank intervention potentially absent today.
• Spot USD/KRW has seen additional selling interest above 1337, which was around yesterday’s highs. We sit back at 1334/35 currently. The 1 month NDF is in the 1332/33 region. Equity sentiment is weaker, the Kospi off ~0.80%. Offshore investors have sold -$176.6mn of local shares so far today. Headlines have cross from chipmaker SK Hynix that it is investigating the presence of its chips in the Huawei phone. The company stating it doesn’t do business with Huawei since the US introduced tech related curbs.
• The SGD NEER (per Goldman Sachs estimates) is little changed on Thursday as the measure continued to nudge away from late August's cycle highs yesterday. We now sit ~0.7% below the top of the band. USD/SGD printed its highest level since early December 2022 this morning before paring gains as the USD ticked away from session highs. The pair last prints at $1.3640/45, and is ~0.1% firmer this morning. August Foreign Reserves are on tap today, the prior read was $340.79bn.
• USD/MYR is observing narrow ranges in early dealing, there has been little follow through on moves and the pair is holding near its highest level since mid-July. On Wednesday the pair rose ~0.2% as broader USD trends dominated flows. USD/MYR now sits ~4% above levels seen at the beginning of August. On tap today we have the latest monetary policy meeting from the BNM, the Overnight Policy Rate is expected to be held steady at 3.00%.
• USD/INR printed its highest level since late October yesterday, as the pair sits little changed on Thursday holding near its record high. Higher Oil prices and US Yields weighed on the Rupee on Wednesday seeing USD/INR firm a further ~0.1%. The pair is ~3% above its 2023 low seen in January. In the first 3 business days of September a net outflow of $230mn was seen from Indian equities by foreign investors.
• USD/PHP sits down slightly from recent highs, last near 56.86. There appears to be resistance ahead of the 57.00 level, which has been cited as the top end of the assumed FX range by the authorities. Local equities are noticeably weaker today, down over 1% but this hasn't impacted sentiment in the FX space.
• USD/THB is pressing for a break above 35.60 in latest dealings, but hasn't been able to breach this level. We continue to see resistance around this level, which marked mid August highs. Late June highs were around 35.75. The local data calendar remains quiet, with just FX reserves data out tomorrow.• Focus remains on the roll out of the new government's fiscal policy agenda. PM Srettha is set to unveil policy priorities next Monday. Cash handouts, through a so-called digital wallet, lower energy prices and debt relief are some of the main focus points.