USD/Asia Pairs Higher, But Rupiah Strengthens As Local Markets Return

With the exception of USD/IDR, all other USD/Asia pairs are higher today. There was a brief period of USD weakness post the better than expected Caixin China PMI, but this didn't last. Tomorrow, the main data points in focus will be inflation prints in Thailand, the Philippines and Taiwan.

• USD/CNH dips have been supported. The pair to 7.1030 post the PMI beat, but we have steadily recovered since, the pair back near 7.1200 at the time of typing. Recall Friday's lows were sub 7.0700. Weaker onshore equities have weighed at the margins, with not much positive follow through from Friday's bounce. A firmer US yield backdrop also weighed.
• 1 month USD/KRW has outperformed at the margins, last near 1305. Earlier highs in the pair came in at 1308/09 but this region found selling interest. The Kospi continues to push higher, now above 2610, +0.45% firmer for the session.
• Spot USD/IDR has returned from a two day break (Thur/Fri) last week to gap lower in the first part of trade. The pair is back to the 14880 level, after closing last Wed just under 15000. Part of this is catch up with lower USD levels more broadly since the last spot close. Higher oil prices will be helping IDR at the margins, with palm oil prices recovering some ground in the second half of last week. Indonesian CPI inflation was lower than expected in May and down on April. Headline CPI rose 4% y/y down from 4.3% the previous month, the top of the target band, and core was 2.7% down from 2.8%.
• USD/PHP has spiked back above 56.00, last in the 56.10/15 region, around 0.40% above closing levels from the end of last week. The simple 200-day MA is nearby at 56.12, but we have seen stronger selling resistance on moves into the 56.30/56.40 region in recent months. Higher oil prices are likely weighing at the margin, given the Philippines already less than favorable external trade dynamics. Still, prices for Brent crude are down on earlier session highs (last around $77/bbl), which has likely tempered bearish sentiment to a degree.
• USD/INR is pushing higher, last near 82.55, versus lows from last Friday sub 82.30. Higher oil prices will be a headwind, while the services PMI printed at 61.2 for May, down from the 62.0 Apr print, but still suggestive of a supportive growth back drop.