USD/Asia Pairs Higher Amid Equity Losses, US Yield Uptick, USD/TWD Back To 2016 Levels

USD/Asia pairs are seeing gains across the board, albeit with varying degrees of beta. Broader USD sentiment is firmer, as the BBDXY index ticks higher. Regional equity losses are evident, a USD support point, while US yields have ticked higher, led by the front end (+2bps). The Fed's Daly spoke earlier, she acknowledged the improvement in inflation, but that we still have a way to go. Her comments were largely in line with other Fed speakers, there was no reaction from the market.

• USD/CNH is drifting higher, last above 7.2830, recent highs above 7.2900 remain intact for now. The USD/CNY fixing was set above 7.1300 earlier, but remained sub recent highs. The equity backdrop is modestly softer while the market is awaiting Third Plenum details. So far there have been high level headlines, which haven't shifted market sentiment. Focus is on injecting momentum into economic growth, although the market will want to see details on how this will be achieved.
• Spot USD/KRW is gravitating higher, last near 1387. Early July highs printed near 1392. Equity weakness is weighing on the won, the Kospi down over 1%, as tech headwinds (trade protectionism from the US a major driver) drive outflows from both South Korean and Taiwan equities.
• Spot USD/TWD has surged to 32.76, +0.45% weaker in TWD terms. This is fresh highs in the pair going back to 2016, with 33.00 the next logical upside target. Weekly outflows from Taiwan stocks sit close to -$3.3bn to the end of Thursday. The Taiex has lost nearly 6% from earlier July highs.
• USD/IDR is back above 16200, losing 0.30% in IDR terms so far today. Higher risk aversion will be weighing on the rupiah (5yr onshore CDS is ticking higher). This puts us back just above the 50-day EMA, while the 20-day is at 16233. A move above this level would end the recent downtrend in USD/IDR.
• USD/THB is holding close to session highs, above 36.20, off more than 0.7% in baht terms. Losses elsewhere are more modest.