USD/Asia Pairs Lower Across The Board On Further Equity Recovery, KRW Surges

USD/Asia pairs lower across the board in the first part of Friday trade. The strongest performers have been KRW and TWD amid better regional equity sentiment and reduced global recession fears. THB and MYR have also rallied, while IDR has been close to steady in spot terms.

• USD/CNH sits off earlier highs, last just under 7.1700. We were testing 7.1900 ahead of the CNY fixing, but a slightly lower outcome in USD/CNY terms tempered bullish sentiment. July inflation data saw a stronger than forecast rise in headline CPI, but this largely reflected a food price rise. Other price areas still suggest a fairly benign domestic demand backdrop. Bond yields rose onshore, aided by the headline CPI beat and the further crack down on speculation in the space by the authorities.
• Spot USD/KRW has sunk more than 1%, last under 1362. The better regional equity tone/paring back of global recession risks have been positives. We also had a former BoK board member push on near term easing risks from the central bank. Downside focus is likely to rest around Monday lows near 1355.
• TWD continue to rebound spot up 0.4%, the 1 month NDF up 0.60% in TWD terms. USD/TWD 1 month near 32.00 is testing sub the 200-day EMA. The Taiwan currency appears to be playing catch up with the firmer North Asia FX trend in recent weeks.
• USD/MYR is back to 4.4550, off 0.40%, after finding selling interest above 4.5000 in recent sessions. Malaysian IP figures were better than expected for June, up 5%, continuing some of the positive recent run of data. USD/THB is tracking in the 35.20/25 region, just up from recent lows. 35.00 will be the downside target. There have been political headlines out today in Thailand but market sentiment has not been impacted.
• USD/IDR has been relatively steady in spot terms, last near 15890. The 1 month NDF is lower, back near 15920. The recent tick up in US real yields may be tempering IDR demand at the margins.