USD/Asia Pairs Lower But Away From Best Levels

USD/Asia pairs are lower but away from best levels. USD/CNH got to fresh multi-week lows but has recovered some ground. 1 month USD/KRW is also higher, weighed by weaker small cap equities and higher USD/JPY levels. MYR and THB has outperformed though. For Malaysia, PM Anwar has unveiled a plan to reset the economy's growth trajectory. Tomorrow delivers South Korea IP, along with Q2 GDP in Taiwan.

• USD/CNH got to fresh lows of 7.1161 post the stronger CNY fixing and a buoyant equity risk mood. June industrial profits were -8.3% y/y, versus -12.6% prior. With USD/JPY recovering this afternoon though, USD/CNH has pared earlier losses. We sit back at 7.1370/80 currently, still around 0.20% stronger in CNH terms for the session.
• 1 month USD/KRW hasn't been able to sustain lows sub 1270. We sit back at the 1275/76 level currently. This is -0.50% weaker in won terms for the session so far. Weakness in the Kosdaq equity index, down a further 1.2% may be weighing at the margin, with valuation concerns continuing in the battery EV space. Higher USD/JPY levels (back to a 140.00 handle) have likely weighed as well. Earlier business sentiment readings for August moderated. The BoK also tweaked its lending facility to boost liquidity.
• USD/THB sits a touch above session lows in latest dealings, last in the 34.05/10 region. This is +0.50% from a baht standpoint and a continuation of yesterday's downtrend in the pair. Some catch up to USD weakness against the majors post yesterday's onshore spot close is another positive. On the political front - "The Constitutional Court will consider next Thursday whether it will accept for deliberation a petition regarding the renomination of Move Forward Party (MFP) leader Pita Limjaroenrat as prime minister" per the Bangkok post. IP growth for June was slightly weaker than expected at -5.24%y/y, -3.00% forecast).
• The rupee is little changed in early trade, the Rupee is lagging in the USD/Asia space as broader USD weakness dominates on Thursday. The Bloomberg Asia Dollar Index is up ~0.3%. USD/INR sits a touch above the 82 handle. Strong equity inflows have continued with $348.96mn on Tuesday, inflows for July now total $3.891bn.
• The Ringgit is firmer in early dealing as broader USD trends, which have seen the greenback weaken in Asia after yesterday's FOMC meeting, dominate flows. USD/MYR is down ~0.5% and last prints at 4.5250/70. The pair sits a touch off month to date lows and is at its lowest level since 14 July. Malaysian PM Anwar has unveiled a plan to reset the economy's growth trajectory whilst boosting incomes and participation of women in the workforce. The key goals are for Malaysia to be among the top 30 global economies in the next 10 years and improve its human development index ranking to the top 25.
• The SGD NEER (per Goldman Sachs estimates) is little changed in early dealing, the measure sits a touch off cycle highs and is ~0.2% below the top of the band. Broader USD trends are dominating in Asia, the greenback has been pressured after yesterday's FOMC rate decision and press conference. USD/SGD is down ~0.2% and sits at its lowest level since 18 July. The pair last prints at $1.3215/25. The Unemployment rate ticked higher to 1.9% from 1.8% in June, the uptick in unemployment has been expected.
• USD/IDR has drifted back sub 15000 on the back of broader USD weakness. Still, this is lagging broader Asia FX trends and higher beta FX, which have seen stronger gains against the USD. IDR has lagged the generally softer USD trend over the past month. Along with TWD, they are the only Asia FX currencies not to have risen against the USD (although INR gains are only very modest). Current USD/IDR levels leaves us within recent ranges. EMA levels are clustered nearby. On the topside is the 200-day at 15040, on the downside is the 50-day at 14985. A weak US yield backdrop should aid the rupiah all else equal and enable some catch up with softer USD trends.