USD/Asia Pairs Lower Amid Broad USD Weakness, CNH Lags

USD/Asia pairs are lower in line with broader USD/US yield softness post the CPI print from Wednesday. Regional equity markets have also generally been positive, driving outperformance from the likes of KRW and TWD. CNH is the clear exception, holding steady against the USD. Still to come today is Indian wholesale inflation data. The focus tomorrow is China's August activity data prints and the 1yr MLF decision (no change expected).

• CNH is underperforming broader USD softness. After hitting earlier lows close to 7.2600 the pair rebounded to 7.2866, before settling back under 7.2800. We last tracked near 7.2740. headlines crossed from Reuters that large China banks are being asked to stagger USD purchases. CNH deposit rates in Hong Kong have ticked up further, the 1 month to 5.14%, highs back to 2018. The 3 month surged to 4.42%, also fresh highs back to 2018. CNH implied yields are a touch below recent highs.
• USD/TWD has moved away from recent highs. The pair last near 31.88, against earlier highs in the week near 32.07. This puts us under the 20-day EMA, (around 31.90). We haven't breached this support point in any meaningful way since mid July. The 50-day EMA sits further south around 31.65. TWD is benefiting from the pull back in USD/CNY. The local equity back drop is also on the improve, the Taiex +1.25% amid broad Asia Pac gains (ex HK/China).
• 1 month USD/KRW is tracking to fresh lows for the week, last near 1321. The +1% equity gains have helped, while the BOK has warned of financial imbalances emerging again. This follows yesterday's rise in household debt levels.
• USD/INR has opened dealing little changed from yesterday's closing levels, the pair has held below the 83 handle in recent dealing however the 20-Day EMA (82.8760) has supported the pair as narrow ranges are observed. The RBI is said to have asked some foreign banks about operational aspects of handling increased custodian flows into the country ahead of JPMorgan’s bond index review, The Economic Times reported. On tap today we have August Wholesale Prices, a fall of 0.60% Y/Y is expected.
• The Ringgit continues to observe narrow ranges with little follow through on moves. USD/MYR is consolidating after rising ~4% since the beginning of August. Palm Oil has firmed off a 2-month low seen on Tuesday, front month future currently sits ~2.5% above Tuesday's session low. Palm’s discount to soybean oil expanded to $542 a ton, compared with $515 on Friday and an average of $488 in the past year.
• The SGD NEER (per Goldman Sachs estimates) is little changed in early dealing on Thursday, the measure sits well within recent ranges and is ~0.7% below the top of the band. USD/SGD has again been supported below $1.36, broader USD flows pressured the pair below the handle before support came in and losses were pared. A reminder that the local docket is empty this week. The next data of note is Monday's August Export data.
• USD/PHP continues to track recent ranges, the pair last at 56.70, similar to closing levels from yesterday. Current USD/PHP levels continue to look a little elevated relative to BBDXY trends, but the divergence is not large. The pair remains comfortably within broad recent ranges of 56.50/57.00. The next big domestic focus point is likely to be next Thursday's BSP decision. No change is expected in the policy rate at this stage (currently 6.25%).