USD/Asia Pairs Firm, IDR & THB Underperform

USD/Asia pairs are mostly higher ahead of month end. China PMIs were weaker than expected, but didn't have a lasting impact on sentiment. USD/CNH found selling interest above 7.1400, while local equities have struggled for positive traction. IDR and THB, along KRW have seen losses, particularly for the rupiah. Tomorrow, we get the Caixin PMI in China, along with South Korean Nov trade figures.

• USD/CNH got to highs of 7.1455 not long after the PMI misses. Manufacturing stayed in contraction, services nearly joined it. However, we found selling interest and pulled back to 7.1230 before stabilising. Local equities are struggling to end the month on a positive note. The pair was last near 7.1330.
• Spot USD/HKD has continued to climb, the pair last near 7.8100, just below session highs (7.8109). This puts us back above the 20-day EMA (near 7.8050), while the 50-day is near 7.8130. The pair hasn't been above the 20-day EMA since early Nov. Recent lows rest at 7.7861. The move up in USD/HKD has coincided with a ticker higher in US-HK 3 month interest rate differential (last -23bps, versus recent wides of -32bps). Still, USD/HKD started moving higher before the yield differential shifted back in favor of the USD. Yesterday's Hong Kong equity weakness, where the HSI closed very close to YTD lows may have been a factor.
• 1 Month USD/KRW has tracked recent ranges, last near 1289, slightly above NY closing levels from Thursday. The BoK held rates at 3.50% as expected. Policy is likely to stay restrictive for some time to ensure inflation comes down, although less members saw the need to tighten policy. Earlier data showed weaker than expected IP figures, due to a slump in chip production for Oct.
• The rupiah is underperforming in the first part of Thursday trade. USD/IDR is +0.60% higher, last tracking near 15485. his leaves it as comfortably the worst performer in EM Asia FX for the session so far. US yields have stabilized somewhat, but are only a touch above recent lows. Today's move high in USD/IDR is also at odds with Wednesday weakness in US real yields. Month end could be seeing USD buying flows coming through. BI noted at its annual meeting late yesterday that it may be in an extended pause phase, as rates stay high to curb inflation risks (BBG).
• USD/THB has regained some ground, last near 34.94, +0.35% firmer for the session. This is in line with broader USD consolidation. Yesterday's on hold BoT outcome highlighted the increased volatility of the baht (8-9% now versus 3.-4% prior, BBG). Recent lows in the pair rest under 34.60, while the simple 200-day is around 35.00.