USD/Asia Pairs Mostly Lower Post FOMC

USD/Asia pairs are mostly lower in the aftermath of a softer dollar/lower US yield backdrop post the US FOMC. China markets remain closed until next Monday. USD/CNH has fallen, now back under 7.2400. NDF gains against the USD have been more muted but still evident as the first part of Thursday trade has unfolded. Tomorrow, we have Thailand CPI in focus, along with Singapore retail sales.

• USD/CNH has been sold on upticks to 7.2450, but is seeing some support sub 7.2350. We were last near 7.2370. Stronger yen levels in late Wednesday US/early Thursday Asia Pac trade helped CNH, but follow through has been limited. With China markets out there is no onshore spot anchor. Hong Kong markets returned today, with positive equity sentiment evident. Part of this reflects optimism around the outlook following the recent Politburo meeting.
• 1 month USD/KRW sits marginally lower versus end NY levels on Wednesday. The pair was last around 1374.50. This keeps us within recent ranges. We had earlier comments from officials vowing to curb excessive volatility given the FOMC meeting and on-going Middle East concerns. On the data front, the April CPI was a touch below expectations. The April PMI also eased further but some of the detail around output and new orders was encouraging.
• Spot USD/IDR sits a touch above session lows, last near 16205. It is a similar backdrop for the 1 month NDF. A fresh high above 16300 for spot (Apr highs of 16288) may have been avoided at least in the near term. Still, the 20-day EMA is back at 16086.3, so a further rally is still needed to turn the technical tide. The less hawkish than feared US FOMC outcome, particularly in terms of Powell comments has helped pull US yields away from recent highs. ID-US 10yr differentials sit close to multi month highs, last near +260bps. Indonesia’s April CPI printed close to expectations at 3.0% y/y for headline and 1.8% y/y for core, unchanged from March
• Elsewhere, we have seen solid gains for spot THB, up around 0.40%. This puts USD/THB back under 37.00, last near 36.90. PHP is up around 0.35%, leaving USD/PHP, in the 57.55/60 region. This is still up from recent lows sub 57.50.