USD/Asia Pairs Continue To Pare Late August Losses

USD/Asia pairs are higher across the board in the first part of Tuesday trade, albeit away from session highs. The risk off tone in parts of the equity space haven't helped, although losses for key indices are not beyond 0.50% at this stage. US Tsy yields re-opened higher, but are away from session best levels as well. Higher beta FX, led by the AUD has faltered in the G10 space, although yen gains have likely helped some Asian currencies at the margin.

• USD/CNH got to highs of 7.1273, but sits lower now, last near 7.1220/30, only modestly weaker in CNH terms. We are closing the gap towards levels that prevailed last week before the exporter led wash out. However, for now we remain sub resistance at the 20-day EMA which is above the 7.1400 level. Equity sentiment is more mixed today, but markets are struggling for major upside.
• Spot USD/KRW got just above 1344 at the height of the USD strength, sits back near 1342 at the time of writing. These earlier highs coincided near August 23 highs. Local equities are down, but losses are not large at this stage. Earlier data showed Korea's CPI moderated in August, taking pressure off the Central Bank. The 2% yoy price rise brings the CPI back in line with the BOK target.
• Elsewhere, South East Asia FX has seen larger spot losses against the USD. This arguably reflects the greater gains these currencies saw against the USD through parts of August.
• USD/IDR got above 15580 in the first part of dealing, but now tracks around 0.15% weaker in IDR terms, last under 15550.
• PHP is off by around 0.60%, the pair last near 56.70. MYR is off by around 0.40%, although the pair did find some selling above 4.3800.
• All these USD/Asia pairs remain sub their respective 20-day EMA resistance points. Hence today's gains may well still be seen as corrective in nature, rather than the start of a renewed bullish USD trend.