USD/Asia Upticks Faded

Asian FX weakness hasn't persisted, with upticks in USD/Asia pairs sold into by the market. 6.8000 remains a resistance point for USD/CNH, while USD/CNY continues to track 100pips lower compared with offshore spot. The high yielders have also played some catch up over the past few sessions. Tomorrow focus is likely to rest on China inflation prints, while Indian CPI is also due.

• USD/CNH got above 6.7970 before selling interest emerged, as broader USD sentiment softened. The pair dipped towards 6.7700 before support emerged. The CNY fixing remains close to neutral from a trend standpoint.
• 1 month USD/KRW got near 1248, but the weaker USD against higher beta plays and resilient onshore equities helped sentiment. The pair last tracked at 1243. Employment growth continues to ease, while the first 10-days of trade data for January showed still soft export growth on an average daily basis.
• USD/INR opened lower towards 81.60, before rebounding back to 81.80, but upticks have been sold by the market. The rupee outperformed yesterday, USD/INR had its largest single day gain since 11 Nov, down ~0.7%. In the past 2 sessions the Rupee has strengthened by ~94 paise, breaking below its 50-day EMA in the process, as it finally plays some catch up with the lower USD trade. Note the 100-day EMA sits just under 81.50. We haven't been below this level since early 2022, see the second chart below. On the wires tomorrow we have Nov Industrial Production and Dec CPI, before Dec Trade Balance on Friday.
• USD/IDR has also lost ground. The pair last at 15485, -0.57% lower for the session. Rupiah bulls will eye a test sub 15400, lows from early Dec. The authorities are considering expanding a regulation that requires export earnings to be kept in special bank accounts. This rule already applies for resource exports but could be expanded to the manufacturing sector.