USD/Asia Pairs Still Biased Higher

USD/Asia pairs are mostly higher, in line with broader USD trends and regional equity market weakness (for the most part). USD/CNH is away from earlier highs, but dips remain supported as local equities struggle to sustain positive momentum. USD gains have been slightly firmer against the likes of THB, MYR and PHP in SEA. We still have the BSP decision to come, no change is expected. Tomorrow, we have Q2 Malaysia GDP on tap and July trade figures. Taiwan Q2 GDP revisions are also due.

• USD/CNH got close to 7.3500 in early trade, before correcting lower. We pulled back to 7.3330/40 but dips have been supported. The CNY fixing was again very strong relative to the consensus, while onshore equities opened noticeably weaker. Equities have recouped some losses, but are struggling to gain positive traction. Onshore USD/CNY spot has pushed higher, breaking above 7.3150.
• The USD/HKD recovery continues, the pair currently just below recent highs, last tracking near 7.8330. Dips sub 7.8300 have generally been support today and we are tracking higher for the 4th straight session. We are above all key EMAs now, with the 200-day back near 7.8300 potentially a support point. Yield momentum remains skewed in the USDs favor. 3 month Hibor continues to edge down from recent highs, last at 5.02%, we were at 5.43% near the start of August.
• USD/INR has re-opened, after being closed for 2 days due to the observance of national holidays, sitting a touch above the 83 handle as broader USD trends dominate flows. The pair sits a touch off its highest level since October 2022 and has firmed ~1% in August. The latest CDS data shows that a total net of $182mn in Indian equities have been bought by foreign investors in August. A reminder that the domestic data calendar is empty until 31 August when Q2 GDP crosses.
• USD/PHP is firmer for the session so far, last in the 56.65/70 region. This is 0.30% weaker in PHP terms versus yesterday's closing level, but the pair remains within recent ranges. Recent highs are around the 57.00 level, while early August highs in the 56.45/50 region may provide some USD support if we see a concerted pull back.• Coming up later is the BSP decision. No change is expected, with focus on BSP rhetoric, particularly around the policy bias. Fallout for PHP could materialize if the central bank sounds too dovish, although that seems unlikely given recent commentary from the Governor.
• USD/MYR is holding at August highs, as of yet on Thursday the pair has been unable to follow through on an early breach of month to date highs . Broader greenback trends continue to dominate flows, as higher US Tsy Yields weigh on the Ringgit. A reminder that tomorrow Q2 GDP and July Trade Balance are due. GDP is forecasted at 1.1% Q/Q for Q2.
• The SGD NEER (per Goldman Sachs estimates) is little changed in early dealing this morning and is well within recent ranges, we currently sit ~0.8% below the top of the band. Broader USD trends continue to dominate flows, USD/SGD ticked higher extending YTD highs. The pair is marginally firmer in early dealing on Wednesday and last prints a touch above the $1.36 handle. July export data was weaker than expected for Singapore. For the month we fell -3.4%, versus +1.3% forecast. The prior read was +5.2%. Electronic exports were down -26.1% y/y, versus -16.0% prior.
• USD/THB has remained on the front foot during today's session, the pair last in the 35.50/55 region, down slightly from session highs. Yesterday we closed at 35.37, as the market saw some relief with the next PM vote scheduled to go ahead on August 22. Still, firmer USD levels post the onshore spot close have weighed. All key EMAs for USD/THB sit back below 35.00, while YTD highs in late June at 35.71, aren't too far away.