USD/Asia Pairs Lower Again, Although USD/THB Rebounds On Fresh Election Uncertainty

USD/Asia pairs are uniformly lower, with USD/CNH tracking to fresh multi week lows, aided by softer dollar trends against the majors. The strong exception is USD/THB, which rallied over 1% from intra-day lows, amid fresh election uncertainty around PM candidate Pita. Tomorrow the focus is on China trade figures for June, with export growth expected to cool further, and the BoK decision, with no change expected.

• USD/CNH hit fresh multi-week lows of 7.1857, but sits slightly higher now, last just above 7.1930. Weaker USD trends, with the BBDXY sub 1217, led by USD/JPY has helped CNH sentiment. Stimulus talks continue, with onshore media highlighting onshore analysts calling for fiscal stimulus in H2. At this stage, onshore equities are struggling to gain much traction.
• 1 month USD/KRW has tracked to fresh lows back to mid June. We got to a low under 1286, but now sit slightly higher at 1288. Lower USD/JPY levels is helping, while the equity backdrop has remained positive, although offshore investors have sold $102.4mn of local equities so far today. Tomorrow, the BOK is widely expected to leave rates on hold at 3.50%.
• USD/THB has firmed on headlines that the Thai poll body will refer PM candidate Pita's election eligibility to the constitutional court, according to local media reports. This follows earlier reports of Pita owning media shares, which may have breached election rules. USD/THB was at 34.65 earlier in the session but spiked to 35.075, before settling back now at 34.91/92 (a +1% trough to peak move). This comes ahead of tomorrow's gathering of parliament to vote for a new Prime Minister. These latest headlines clearly cast doubt on how tomorrow's vote will unfold and Pita's candidacy more broadly. Note that even if Pita fails to secure enough votes to become PM, he can still stand again at the next parliament sitting, which is expected on July 19.
• Broader USD/Asia flows are dominating in early dealing for the Rupee, USD/INR is ~0.1% lower as the greenback is pressured in Asia. The pair deals at 82.25/30, and sits a touch above the 20-Day EMA (82.2771). We sit ~0.6% below the high from July 7 (82.7562). Equity inflows from Foreign investors have continued in July, a total of $1.46bn in Indian equities have been purchased in the month till Monday. On tap today we have the June CPI print, which is expected to tick higher to 4.60% Y/Y from 4.25% in May. Also due is May Industrial Production, a print of 5.0% Y/Y is forecast and the prior read was 4.2%.
• The SGD NEER (per Goldman Sachs estimates) has retreated from its highest level since 13 June, printed in early dealing however the measure is holding marginally firmer. We now sit ~0.5% below the upper end of the band. Broader USD trends are dominating flows for USD/SGD, the pair is down ~0.3% today and sits at its lowest level since mid-June. USD/SGD is ~1.5% below month to date highs and last prints at $1.3370/80. A reminder that the only local data of note this week is Friday's Advance Q2 GDP print, a fall of 0.2% Q/Q is expected.
• The Ringgit is holding early gains against the USD, broader greenback trends are dominating flows with this evenings US CPI print in view. USD/MYR prints at 4.6480/4.6520, the pair is ~0.2% lower today and sits ~1% below year to date highs seen in late June. May Industrial Production was stronger than forecast, printing at 4.7% Y/Y vs 0.0% exp. Manufacturing Sales Value rose 3.3% in May.