USD/Asia Pairs Rebound, INR Outperforms Modestly

Most USD/Asia pairs are above lows for the session, with the USD supported on dips. The weaker China inflation data has aided the turnaround, whilst all of the G10 bloc is weaker against the dollar as well. The Rupee is seeing some outperformance. Tomorrow delivers May trade data for the Philippines, while China June aggregate credit data should also be out this week.

• USD/CNH is around session highs, last in the 7.2430/40 region. This is 0.15% weaker in CNH terms versus NY closing levels from Friday. Weaker inflation data has weighed and offset a better equity tone amid optimism that tech regulatory headwinds are now behind us. The pair did get to a low of 7.2200 before support emerged. The CNY fixing was again on the strong side.
• The SGD NEER (per Goldman Sachs estimates) is little changed in early dealing, the measure remains well within recent ranges. We now sit ~0.7% below the upper end of the band. Broader greenback trends dominated flows for USD/SGD on Friday, the pair was pressured as broad based USD weakness weighed. Support came in ahead of $1.3450. Losses have been pared this morning, as weaker than expected Chinese CPI boosts the greenback, and the pair sits a touch under the 20-Day EMA ($1.3487). The Advance read of Q2 GDP headlines this weeks docket, a fall of 0.2% Q/Q is expected.
• The ringgit is little changed from Friday's closing levels in a muted start to the week's dealing. USD/MYR prints at 4.6640/70. On Friday the pair was marginally firmer rising ~0.1% however ranges were narrow with little follow through on moves. The local docket is thin this week, the only data of note is May Industrial Production which crosses on Wednesday. A rise of 1.5% Y/Y is expected, the prior read was -3.3%.
• The Rupee is a touch firmer in early dealing, USD/INR has retreated from its highest level since late May and is down ~0.1% today. The pair is trimming some of Friday's ~0.3% gain, as the Rupee suffered its largest one week fall since early December 2022. The highlight of the week's data docket is the June CPI print which crosses on Wednesday, an uptick in CPI to 4.58% Y/Y from 4.25% is expected. Also due this week is May Industrial Production, an increase of 5.0% Y/Y is expected, which crosses on Wednesday. On Friday June Trade Balance is due, a deficit of -$20.05bn is expected.
• USD/IDR is tracking higher in the first part of Monday trade, the pair last just under the 15200 level. Earlier highs were at 15210. The 1 month NDF is also climbing, last around the 15250/55 level, slightly down from session highs (15275). Both pairs are comfortably above all key EMAs. Note for spot USD/IDR, the simple 200-day MA comes in around 15222. On the data front we had June consumer confidence edged down to 127.1 from 128.3 prior. This is not typically a market mover though.
• Like elsewhere in the region, USD/THB has seen support emerge after tracking lower in the first part of trade. From lows close to 35.05 we now sit back at 35.20, close to unchanged for the session. July highs in the pair come in just above the 35.30 level, while recent lows rest near 34.84. We are above all key EMAs, with the 20-day, near 35.05, the closest. The local data calendar is quiet this week, with only June consumer confidence out on the 13th (this Thursday). Thursday should also see the National Assembly gather, where it is expected to vote for a new PM. Challenger Pita Limjaroenrat may face opposition in the Senate, but held a rally on Sunday to galvanize support.
• Spot USD/PHP sits just below session highs, last near 55.62. This is down slightly from Friday closing levels, but only modestly, with little follow to early USD weakness sub the 55.40 level. There has been some selling interest evident above 55.60 in recent sessions. Key EMAs remain clustered nearby, while the 200-day is slightly lower, just under 55.40. The 1 month NDF was last around 55.67, slightly above NY closing levels from Friday. Tomorrow, we get May trade data, with the market expecting the deficit to remain wide at -$4629mn.