USD/Asia Pairs Fall Post FOMC, CNH Remains Steady

USD/Asia pairs are lower across the board, although CNH remains a noticeable absentee from broader USD swings. Sentiment in the region has been buoyed by lower US yields and generally positive equity market gains post Wednesday's FOMC. The won has been the best performer, although IDR, THB and MYR have also performed strongly. Still to come is the BNM decision later, no change is expected. Tomorrow, we get the Caixin services PMI in China as the main data highlight.

• Yuan vol continues to fall sharply. USD/CNH 1 month implied is fast approaching early 2022 lows, last near 3.51%. USD/CNH tried to track lower in the first part of trade today but couldn't get sub 7.3220, we last tracked near 7.3310. Onshore equities have struggled to maintain a positive tone, with real estate stocks tracking down further. Onshore spot has had even less volatility, last near 7.3180.
• 1 month USD/KRW got to 1338.50, very close to the 50-day EMA, but sits higher now, last near 1341. Spot won is up over 1% and is the strongest performer in EM Asia FX so far today. The better risk on tone in the equity space (+1.7% for the Kospi) has been a key a driver. Earlier Oct CPI was stronger than expected, which BoK suggested would mean price pressures would run ahead of forecasts made in August.
• The SGD NEER (per Goldman Sachs estimates) is little changed in early trade this morning and sits a touch off the touch of recent ranges. The measure sits ~0.5% below the top of the band. USD/SGD is ~0.2% lower as broader greenback flows dominate on Thursday as Asia participants digest yesterday's FOMC rate decision and comments by Fed Chair Powell. Due this evening we have the October Purchasing Managers Index and the Electronic Sector Index. There is no estimate for either print.
• The Ringgit has firmed in early trade on Thursday as US Tsy Yields fell after the FOMC meeting on Wednesday, extending losses on Thursday in Asia. USD/MYR is ~0.4% lower, last printing at 4.7500/40. On tap today we have that latest monetary policy decision from the BMN, there is no change to policy expected.
• The Rupee has opened dealing a touch firmer as onshore participants digest falling US Tsy Yields after Wednesday's FOMC decision to leave rates on hold. USD/INR is testing the 20-Day EMA (83.2148) this morning, the pair is ~0.1% below yesterday's closing levels. Looking ahead due tomorrow we have the Services & Composite PMI components cross.
• USD/THB sits slightly above session lows, last at 36.03. Earlier we got to 35.96. This was above lows from earlier in the week, which came just under 35.90. Current spot levels are very close to the 50-day EMA, with recent breaks below this level unable to be sustained. Below that rests the 100-day near 35.60. On the topside, the 20-day is near 36.25. As we noted yesterday, lower highs for USD/THB rebounds is a positive technical backdrop for the baht, but sensitivity to the US Fed outlook, like elsewhere in the region is likely to remain high in the near term.
• USD/IDR sits comfortably off Wednesday closing levels in the first part of trade. The pair last near 15850, 0.50% stronger in rupiah terms. The 15950/60 level looks to represent somewhat of a line in the sand in terms of near term topside resistance. On the down we have spent little time sub 15850 in recent weeks. Further on the downside is the 20-day EMA just under 15800. Elsewhere in the cross-asset space, local equities are +1.9% higher at this stage, while 5yr CDS is back to 93bps.