USD/Asia Pairs Higher, CNH & INR Outperform

Most USD/Asia pairs have tracked higher today, in line with broader EM weakness. The combination of higher US yields and weaker equity sentiment, is weighing on regional FX. CNH and INR Have outperformed. USD/MYR has hit fresh highs back to 1998. USD/IDR has broken above the 15800 level. Coming up is the BI meeting, no change is expected but the softer IDR is likely to be a focus point. Tomorrow delivers the China LPR decisions, no change is expected.

• USD/CNH has been relatively steady, outperforming the rest of the USD/Asia bloc. The pair was last near 7.3285, little changed for the session. The CNY fixing was steady, holding under 7.1800, with the fixing error widening to offset the firmer USD trend. House prices fell by 0.30% in September on par with the August fall. Local equities continue to fall quite sharply, the CSI 300 off 1.60% to 3550 in index terms, fresh lows back to November last year.
• 1 month USD/KRW sits just off session highs, last near 1356. Earlier highs were just above 1357. This was through Wednesday session highs, but saw little follow through. Pressure is evident from broader USD gains, and a slump in local equities. The Kospi isn't too far away from recent lows near 2400 in index terms. The on-hold BoK outcome didn't appear to impact KRW sentiment much. The majority of the board are still open to a rate hike. Market pricing for 6 months ahead looks little changed.
• Spot USD/IDR has broken above 15800, hitting fresh highs at 15850 (sitting just under this level in recent dealings ~15848). The rupiah is down 0.75% for the session so far, and at its weakest levels since April 2020. The 1 month NDF has also continued to climb last near 15860, down a further 0.30% versus NY closing levels. It is the weakest performer in EM Asia FX so far today. There doesn't appear to be any official pushback yet on this renewed weakness. It is likely to see focus on the BI meeting later and whether the central bank would turn hawkish again to curb FX weakness.
• The Rupee has opened dealing little changed from yesterday's closing levels in a muted start to Thursday's, USD/INR sits at 83.26/27. Narrow ranges continue to persist, the 20-Day EMA (83.1964) is providing support which rallies are capped ahead of 83.30. Equity Outflows by Foreign Investors have stabilised in recent sessions, the net outflow for October to the 17th now sits at $814mn.
• The Ringgit has been pressured in early dealing as US Tsy Yields tick higher. USD/MYR has printed a fresh cycle high at 4.7642 before marginally paring gains in recent dealing. The pair is at its highest level since 1998. Septembers Trade Surplus was a touch firmer than estimated printing at MYR24.52bn vs 21.70bn expected.
• The SGD NEER (per Goldman Sachs estimates) is little changed in early dealing on Thursday and sits a touch off the base of the recent ranges. The measure sits ~0.7% below the top of the band. Broader greenback trends have dominated flows for USD/SGD, the pair has firmed above the $1.37 handle rising ~0.5% from trough to peak yesterday. We sit at $1.3730/35, little changed from yesterday's closing levels. Looking ahead, the next data of note is Monday's September CPI print, an uptick in headline CPI to 4.2% Y/Y from 4.0% is expected.
• USD/PHP has risen but remains within recent ranges. The pair was last near 56.87, still wedged between 56.50/57.00. USD/THB is also higher, last tracking around 36.40, but this is still sub recent highs.