USD/Asia Dips Supported

USD/Asia pairs have been mixed for the most part, failing to benefit a great deal from the positive equity lead seen. Dips in USD/CNH remain firmly supported, the pair last above 7.2300. The won has outperformed but is away from earlier highs. Other moves have been more modest, although the dollar has been supported against INR and IDR. Tomorrow the focus will be on China LPR outcomes (if they print), with no change expected, along with the BI decision.

• USD/CNH dips sub 7.2200 were supported, and the pair is now testing overnight highs around 7.2330/40. No change is expected in the LPR rates tomorrow, although they may not print. China equities continue to lag, although some property names have performed better today on planned state backed bond issuance. CNH has underperformed some majors, but is moving in line with the EUR.
• USD/KRW got to a low sub 1415 in the 1 month NDF, but we are now back to above 1420. Equity sentiment has been volatile today, with the Kospi last sitting flat. Still the won is around 0.30% stronger since the NY close, outperforming others in the region.
• USD/INR is just above 82.35, seeing USD demand yesterday ahead of the 82.00 level. Watch for intervention above 82.40, although such flows are reportedly taking place more in the forward area, as the authorities are mindful of running down spot FX reserves.
• Spot USD/IDR trades +16 figs at 15,483, with bulls looking for gains past the 61.8% retracement of the 2020 sell-off/Apr 23, 2020 high of 15,574/15,598. Bank Indonesia will announce its monetary policy decision tomorrow (our usual preview is forthcoming). Bank Indonesia Gov Warjiyo this morning reaffirmed the target for inflation to return to the target range in 3Q2023, while noting that the central bank will continue to intervene in the market to stabilise the rupiah.
• Spot USD/PHP operates within touching distance from the 59.00 all-time high, even as President Marcos and his administration stepped up their verbal interventions surrounding peso depreciation. We were last at 58.915. We may have to defend the peso in the coming months," Marcos tweeted on Tuesday. He added that "number one priority is still inflation" and officials "will continue to use interest rates to mitigate the effects."