USD/Asia Pairs Lower, CNH Steady Though, BI Still To Come

USD/Asia pairs are mostly lower, in line with continued improvement in equity sentiment, while higher beta plays have also outperformed in the G10 space. CNH hasn't rallied though, holding steady near 7.2600. KRW, THB and IDR have rallied, albeit sit slightly away from best levels. The BI decision comes later, it is expected to be a close call, but we sit in the no change camp. Tomorrow, we have South Korea business sentiment, along with Q1 GDP. The Malaysia CPI is also due.

• USD/CNH sits little changed, last near 7.2600. It is a similar backdrop for spot USD/CNY onshore, which is unchanged at 7.2455. Onshore and offshore levels continue to exhibit low volatility/correlation with respect to broader USD trend shifts at this stage. The firmer yield backdrop has helped US-CH yield differentials edge down, but we are only a touch off recent highs (2yr spread at +309bps, 10yr around 237bps), with the little positive follow through to CNH, as there remains a decent wedge between current spot levels and the spreads. CNH implied forward yields have fallen further.
• 1 month USD/KRW sits up from earlier lows, last near 1368. Earlier we got close to 1365, which is near the 20-day EMA. Regional and local equity (+2% for the Kospi) sentiment has been buoyed by tech earnings optimism and recent US yield softness. Earlier we had steady South Korean consumer sentiment for April, while inflation expectations fell a touch.
• USD/THB has fallen back sub 37.00, the pair last near 36.90, slightly above earlier lows. BoT minute headlines have crossed from the last policy meeting. The central bank voted in favor of keeping rates steady by 5-2 at the Apr. It appears the central bank wants to keep optionality (for broader risks and the baht outlook) around the policy outlook given considerable uncertainties facing the outlook. We have also heard from BoT Assistant Governor Piti, who stated that the authorities have intervened in THB to smooth moves, but don't have a specific baht level in mind. Piti also noted that the BOT may need to recalibrate the policy rate if oil prices keep rising, a hawkish development.
• USD/IDR spot has fallen back to 16150/55, around 0.40% stronger in IDR terms. The better tone to regional/global equity sentiment has clearly aided risk appetite for the rupiah. Bank Indonesia (BI) meets today and while consensus expects no change in rates over a quarter of analysts surveyed by Bloomberg expect at 25bp hike due to recent currency weakness.
• Elsewhere, USD losses have been more modest. Spot USD/PHP sits near 57.42, around 0.15% stronger in PHP terms. The rebound in oil prices likely weighing on the PHP rebound. USD/SGD sits under 1.3600, while USD/MYR is near 4.7750.