USD/Asia Pairs Mixed Ahead Of LNY Break, THB Softer On Dovish BoT Hold

USD/Asia pairs have been mixed in the first part of Thursday trade. USD/CNH has steadied, up from earlier lows, last near 7.2100. CPI data was weaker than expected. Local equities are also mixed. THB is the other notable underperformer following yesterday's dovish BoT hold. PHP has seen marginal gains, while steady trends are evident elsewhere. Tomorrow many parts of the region are out as the LNY holiday period commences.

• USD/CNH has remained within recent ranges. The pair last near 7.2100. The CPI y/y print fell back to 2009 lows, which is likely to see continued calls for easier policy settings. Local equities are mixed but volatility continues with recent policy changes and changing of the head of the securities regulator. China markets are closed tomorrow and all of next week for the LNY.
• 1 month USD/KRW has maintained recent ranges, last in the 1325/26 region. Local equities are off earlier highs, but focus is on the policy response to remove the Korea-discount. Tensions with North Korea continue to push higher, albeit not impacting market sentiment at this stage.
• Political uncertainty weighed on the rupiah with USD/IDR rising almost 2% from mid-January to its high on January 26. BI intervention has helped to bring it down and it has fallen in recent days and is now 1.3% below that late January peak. Cabinet stability despite rumours the finance minister might resign has helped the currency marginally. Indonesians go to the polls in less than a week to choose a new President, House of Representatives, the Senate and local legislative councils. Until recently it looked like there would be a runoff in June as no one looked likely to win 50% but all of the last three opinion polls show defence minister Prabowo with over 50% support. It is now looking a lot closer that he will be the next President without a runoff vote.
• USD/THB is tracking higher in the first part of Thursday trade, albeit without breaking out of recent ranges. The pair was last 35.77, around 0.50% weaker in baht terms versus end Wednesday levels (we closed at 35.59 yesterday). Upside targets will focus on recent highs in the 35.80/90 region. A break above these levels could see 36.15 targeted (highs from Nov last year. Earlier Feb lows rest at 35.24. Baht weakness is bucking with the modestly softer USD trend in terms of broader USD indices. Carry over from yesterday's dovish BoT hold (5-2 voted in favor of steady rates, with the previous 8 meetings all being unanimous).