USD/Asia Pairs Mostly Higher, CNH Weighed By Lower Yields

USD/Asia pairs are higher, pretty much across the board. Spot weakness has been strongest for THB and IDR. USD/CNH has climbed back above 7.2900, following another uptick in the USD/CNY fixing. Tomorrow, we have South Korean business sentiment readings, followed by China industrial profits. The BSP decision is due later on Thursday in the Philippines, although no change is expected by us or the consensus.

• USD/CNH tracks near 7.2925 in latest dealings, just short of recent highs (7.2946). Beyond that lies the 7.3000 figure level. Mid November highs from last year were just under 7.3110. The USD/CNY fix was again set higher, near 7.1250. Onshore spot is close to the upper daily trading limit (7.2670). CNH implied yields sit off recent highs., while government bond yields have slipped further, with 2yr yields under 1.70%, the 10yr towards 2.20%, fresh lows back to the early 2000s. Local equities were softer in the first part of trade, but have pushed into the green post the lunchtime break.
• 1 month USD/KRW sits away from earlier highs, last near 1386.50. Earlier highs were close to 1390, where there appears to be some resistance to a fresh break higher through. Helping at the margins is a slightly better equity backdrop, while the A$ bounce has also likely spilled over to some degree. The 1 month NDF is the only firmer currency within the region so far today.
• USD/THB is firmer, last near 36.75/80, around 0.35% weaker in baht terms for the session. Cyclical highs in the pair come in at 37.175. BoT minutes from the last policy meeting noted that baht weakness and capital outflow pressures in part reflected domestic factors. Elsewhere, the central bank didn't sound too dovish, stating a sharp rebound in inflation will work against the economic recovery.
• USD/IDR is back to 16430, weaker in IDR terms by a little over 0.30%. This is just shy of recent highs of 16478 recorded last week. Comments from a BI official stated they are ensuring supply and demand is balanced in the FX market and that exporter supply of USDs is still evident. Note early 2020 highs in the pair came in at 16625.