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USD/Asia Pairs Firmer But Away From Session Highs

ASIA FX

USD/Asia pairs are mostly higher in the first part of Tuesday trade, albeit away from session highs. Yen losses and a mixed regional equity backdrop have been headwinds. Still, aggregate moves have been fairly modest. At this stage the largest losses are in the 0.20-0.30% range. Also note, Thailand customs trade data prints in a little while.

  • USD/CNH remains within recent ranges. The pair got above 7.1300 briefly post another stronger than expected USD/CNY fixing, but this proved to be fleeting. The pair last near 7.1225, little changed for the session. July profits data was better than the June outcome, but his hasn't lifted local equity market sentiment. Poor tech earnings has weighed, the CSI 300 off last 0.60%.
  • Spot USD/KRW remains close to the mid point of recent ranges, last near 1330. Local equities have struggled to gain traction above the 2700 level, while outflows from offshore investors continue. Weaker spending data points to BoK easing risks, but comments this afternoon from the BoK Governor (*BOK RHEE: AUG. 22 DECISION MEANT AS WARNING ON HOUSEHOLD DEBT" - BBG), suggest a near term rate cut may not materialize. The government is ramping up 2025 fiscal spending to support the economy.
  • USD/IDR has firmed with a less supportive global equity/risk backdrop. We were above 15500 in the first part of trade, but now sit back at 15470, still around 0.25% weaker in IDR terms. Finance Minister and Bank Indonesia Governor to speak at parliament meeting on 2025 state budget planning today.
  • USD/PHP sits slightly lower for the session, last near 56.26. Earlier lows were just under 56.20, levels last seen in early April of this year. PHP is the only Asia FX currency up in spot terms today, although this largely reflects catch up as yesterday onshore markets were closed. The technical backdrop for USD/PHP remains skewed to the downside. The cautionary point is that the pair is oversold based off RSI (14), which has been the case for a number of weeks now. PHP has been a laggard within South East Asia FX, as we noted last week, so come catch up may be aiding local FX sentiment.
  • USD/MYR firmed to 4.3550 in early trade, versus the Monday close of 4.3488. We have since drifted a little lower, but remain above 4.3500.

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