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USD/Asia Pairs Modestly Higher, Broader Dollar Gains Continue

ASIA FX
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Most USD/Asia pairs have had an upside bias today, although overall moves have been fairly modest. Negative spill over from G10 FX losses against the USD has been evident, although Asian FX has outperformed some of the losses (such as JPY, -0.45%) seen in this space. Dollar strength looks a carry over from Monday's session. A mixed equity backdrop has also been in play for the region. Tomorrow we have Singapore June trade data, while later on the BI decision is due, although no change is expected.

  • USD/CNH has drifted higher, but at 7.2800, remains sub early Monday highs. USD/CNY spot is back to 7.2650 which is still sub recent highs. The USD/CNY fixing rose but didn't reach fresh highs. Equity sentiment is mixed onshore, while negative in Hong Kong as markets await Third Plenum details/policy initiatives.
  • Spot USD/KRW has firmed, but found some selling interest above 1387. We were last around 1386, still 0.20% weaker in won terms. Local equities are higher, but remain sub recent highs. On the data front we had June trade prices earlier, with the export price index gaining 12.2% y/y, up form 7.6% prior, while import prices rose 9.7%, (from 4.7%). The data calendar is now quiet until next Monday's first 20-days of trade data for July prints.
  • USD/IDR has crept higher, last above 16200, around 0.20% weaker in IDR terms. Risk appetite metrics, such as Indonesian CDS have moved against the local currency. This puts the pair back around the 50-day EMA, with recent lows at 16135. Most focus rests on tomorrow's BI meeting outcome, although no changes are expected. BI has a numerous tools and we expect it to continue using macroprudential policies to support the economy. On the FX front, Governor Warjiyo said that he prefers to use non-rate tools to defend the rupiah, such as intervention and money market deepening securities (see our full preview here).
  • USD/THB has stabilized, last near 36.25, only modestly up from recent lows (just under 36.12). The pair is sub all key EMAs, except the 200-day, which is near 36.08. The baht remains the best EM Asia FX performer in July to date, and over the past trading month. Still, it remains nearly 5.8% weaker against the USD in 2024 to date, with TWD and KRW the only worst performers in the region. Recent baht gains have aligned with lower US-TH yield differentials (amid dovish Fed signs), along with broader USD softness. Firmer gold prices have also likely helped at the margin. We may need to such trends continue for USD/THB to test further on the downside.
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Most USD/Asia pairs have had an upside bias today, although overall moves have been fairly modest. Negative spill over from G10 FX losses against the USD has been evident, although Asian FX has outperformed some of the losses (such as JPY, -0.45%) seen in this space. Dollar strength looks a carry over from Monday's session. A mixed equity backdrop has also been in play for the region. Tomorrow we have Singapore June trade data, while later on the BI decision is due, although no change is expected.

  • USD/CNH has drifted higher, but at 7.2800, remains sub early Monday highs. USD/CNY spot is back to 7.2650 which is still sub recent highs. The USD/CNY fixing rose but didn't reach fresh highs. Equity sentiment is mixed onshore, while negative in Hong Kong as markets await Third Plenum details/policy initiatives.
  • Spot USD/KRW has firmed, but found some selling interest above 1387. We were last around 1386, still 0.20% weaker in won terms. Local equities are higher, but remain sub recent highs. On the data front we had June trade prices earlier, with the export price index gaining 12.2% y/y, up form 7.6% prior, while import prices rose 9.7%, (from 4.7%). The data calendar is now quiet until next Monday's first 20-days of trade data for July prints.
  • USD/IDR has crept higher, last above 16200, around 0.20% weaker in IDR terms. Risk appetite metrics, such as Indonesian CDS have moved against the local currency. This puts the pair back around the 50-day EMA, with recent lows at 16135. Most focus rests on tomorrow's BI meeting outcome, although no changes are expected. BI has a numerous tools and we expect it to continue using macroprudential policies to support the economy. On the FX front, Governor Warjiyo said that he prefers to use non-rate tools to defend the rupiah, such as intervention and money market deepening securities (see our full preview here).
  • USD/THB has stabilized, last near 36.25, only modestly up from recent lows (just under 36.12). The pair is sub all key EMAs, except the 200-day, which is near 36.08. The baht remains the best EM Asia FX performer in July to date, and over the past trading month. Still, it remains nearly 5.8% weaker against the USD in 2024 to date, with TWD and KRW the only worst performers in the region. Recent baht gains have aligned with lower US-TH yield differentials (amid dovish Fed signs), along with broader USD softness. Firmer gold prices have also likely helped at the margin. We may need to such trends continue for USD/THB to test further on the downside.