USD/Asia Pairs Higher On Equity Weakness

USD/Asia pairs are higher today, albeit to varying degrees. Plays sensitive to broader equity trends like KRW and IDR have underperformed. SGD has outperformed though, while USD/CNH has seen resistance ahead of 7.2000. Still to come today is the BoT decision, with +25bps expected. Tomorrow the China Caixin services PMI is on tap. The services PMI is also out for India.

• USD/CNH sits slightly below session highs, last near 7.1900. Earlier highs were just above 7.1980. The weaker tone to equities has weighed, with HK shares off over 2%, the CSI 300 down 0.80%. These moves come despite further stimulus measures, with PBoC reportedly set to guide existing mortgage rates lower. There may be some resistance to a fresh break above 7.2000. Note earlier lows came in at 7.1735.
• 1 month USD/KRW is touch below session highs, the pair last in the 1292/93 region. Earlier highs were near 1294.50. Local equities have sunk, with broad base losses in the region today and US futures lower. Earlier July CPI data came in weaker than expected, but may not shift the BoK narrative as base effects are less favorable as we progress through H2.
• After making fresh lows around 7.7925 yesterday, USD/HKD has drifted a little higher in dealings today. The pair last near 7.7980, a little under +0.10% firmer for the session to date. This is in line with broader USD gains, with both USD/CNH and USD/CNY climbing today. The pair remains below all key EMAs at this stage. The nearest being the 20-day, which comes in just above the 7.8100 level. The 200-day sits above 7.8300. In the past month though spot has generally tracked sub all key EMAs.
• Spot USD/IDR is up a further 0.40% so far today, last at 15180. We aren't too far away from July highs near 15220, which also coincides with the simple 200-day MA. Broader USD gains, coupled with fresh risk aversion in the equity space is likely weighing on the rupiah. The near term focus will be on whether the authorities intervene if we breach the 15200 handle or the 200-day MA region. Note the 1 month NDF has already above the 15200 level.
• The Ringgit sits ~0.5% softer in early dealing on Wednesday, broader USD trends are dominating with the greenback reversing early losses after Fitch downgraded the US to AA+. USD/MYR sits at 4.5400/30, the pair remains well within recent ranges after finding support at the 200-Day EMA (4.5021) on Friday. Looking ahead the domestic data docket is empty for the remainder of the week.
• The SGD NEER (per Goldman Sachs estimates) is a touch firmer in early dealing, the measure is holding near cycle highs and sits ~0.4% below the top of the band. USD/SGD firmed above its 20-Day EMA ($1.3335) on Tuesday as broader greenback trends saw the pair rise ~0.5%. The pair printed its highest level since 12 July before marginally paring gains. The pair is dealing in a narrow range on Wednesday morning and last prints at $1.3360/70. Singapore's rental price growth slowed in the second quarter, a gauge of private residential prices rose 2.8% Q/Q the smallest gain since 2021. On the wires today we have the July Purchasing Managers Index and Electronics Sector Index. There is no estimate for either print.