USD/Asia Pairs Edge Down Recent Highs, BSP Seen On Hold Later

USD/Asia pairs are mixed, albeit within tight ranges for the most part. Some spot levels have seen USD gains, although this largely reflects catch up to dollar strength seen post yesterday's onshore closes. NDF levels have mostly moved away from recent USD highs. Still to come today we have the BSP decision in a little while, no change is expected. Tomorrow, we have South Korea Industrial production, China's Q1 current account, along with Thailand production and trade figures, as the main highlights.

• USD/CNH has edged back down under 7.3000, but ranges have been tight overall. The USD/CNY fixing capped the upside in onshore spot just under 7.2700, which may have lent against further USD/CNH upside, as the CNH-CNY basis hasn't spent much time beyond +300/+400pips this year. On the data front, May profits eased back to 0.7% y/y, from 4.0% in April. Local equities are under pressure, the CSI 300 down around 0.40% at this stage.
• 1 month USD/KRW sits back near 1384, comfortably off Wednesday intra-session highs above 1392. A slightly stronger yen and AUD tone have helped. There may also be some resistance to a near term test of the 1400 level. Local equities are down but the Kospi is still close to the 2800 level. Earlier BoK surveyed data on manufacturing showed a slight downtick in sentiment, although the export outlook ticked higher.
• USD/THB got to highs of 36.985 in the first part of trade, but sits lower now, last near 36.90 (still 0.20% weaker in Baht terms). Headlines have crossed from the Thailand MoF stating they will discuss changes to BoT's inflation target (RTRS). The MoF notes current inflation of 1% is too low and wants monetary policy to boost growth. Such a move, all else equal, would be THB negative.
• Spot USD/PHP has been relatively steady, last near 58.85, little changed for the session and just below recent highs. The markets awaits the BSP decision later. No change is expected. See this link for our full preview.