USD/Asia Pairs Away From Earlier Highs

USD/Asia pairs are higher for the most part, but sit away from session highs in latest dealings. Equity weakness has been evident for most bourses throughout the region, as global core yields have firmed in the first part of 2024 trade. The USD hasn't been able to extend gains against the majors though, which has likely helped stabilize Asia FX sentiment to a degree. Tomorrow, we have South Korean FX reserves and the China Caixin services PMI on tap.

• USD/CNH tried to test above 7.1600 not long after the CNY fixing, which rose compared to Tuesday's outcome (in USD/CNY terms). Local and HK equities have also struggled even with some pockets of strength in the gaming sector. Still, there was little follow to earlier USD/CNH gains, with the pair last near 7.1485, little changed for the session.
• 1 month USD/KRW sits sub NY closing levels, the pair last at 1305/06, around 0.25% firmer in won terms for the session so far. This comes despite a 2% sell off in the Kospi, which is reflective of tech equity weakness in major markets from Tuesday. Resistance in the 1310/20 region, which capped gains in the pair through most of Dec may be evident.
• USD/SGD probed higher in early dealings but found resistance near 1.3280. Note the 20-day EMA comes in 1.3294. The pair was last at 1.3260, little changed for the session. The data calendar has Dec PMI (headline and for the electronics sector) later in the UK session today. Tomorrow sees the S&P PMI measure print. The S&P measure is quite strong, last 55.8, while the other metrics are closer to the 50.0 level. Then on Friday Nov retail sales data prints.
• USD/PHP sits off earlier session highs, the pair last at 55.72, still 0.10% weaker in PHP terms versus Tuesday closing levels. Earlier highs in the pair were at 55.81, amid catch up to broad based USD gains. The simple 200-day MA comes in near 55.80, so that be acting as a resistance point. The next major data focus point will be Friday's CPI print for Dec. The market looks for a 3.9% y/y outcome, versus 4.1% prior. This would put us back into the 2-4% BSP inflation target range. Late last year the BSP pit a forecast range of 3.6-4.4% for the Dec print.
• USD/IDR was above 15500 in early trade but now sits back at 15485 in latest dealings. This is only marginally weaker versus yesterday's closing levels in IDR terms. Focus today will be on local and USD debt auctions, particularly with global yields stabilizing somewhat in early 2024 dealings.