USD/CNH Above 7.03, KRW and TWD Remain Resilient

USD/Asia pairs are mixed, with CNH continuing to weaker, while KRW and TWD remain resilient on the back of stronger local equities, as the tech led recovery continues. USD/PHP is back sub 56.00 ahead of the upcoming BSP decision (no change expected), while USD/INR is drifting higher, back towards 82.50. The data calendar is light tomorrow, with just Malaysian trade data on tap, along with Taiwan BoP figures.

• USD/CNH continues to trend higher, breaching the 7.0300 level this afternoon. We hit a high of 7.0333 before some selling interest emerged. This is +100pips above yesterday's high. The move has been aided by onshore spot USD/CNY gains, with this pair now above 7.01. Onshore equities are firmer but lagging other North East Asia markets.
• 1 month USD/KRW tried to go lower in earlier trade, amid better equity trends, but couldn't get sub the 1327/28 region. We are now back to 1332/33, as weaker CNH levels have weighed. The Kospi has seen better traction, up 0.75%, amid tech optimism, while offshore investors have added a further $185.4mn to local shares.
• Spot USD/TWD has backed away from recent highs, last around 30.76, around 0.20% firmer in TWD terms for the session so far, albeit away from highs. We are back below the simple 200-day MA, which comes in at 30.78, but this doesn't look to be a major inflection point at this stage. The 50 and 100-day MAs sit lower (30.61 and 30.52 respectively). Recent highs have been between 30.80/85. Better local equity trends are aiding the TWD, particularly relative to the softer China currency trend. The TWSE has broken above the 16000 level today, fresh highs back to June last year. There still remains a wedge between these strong levels and USD/TWD, although CNY weakness, coupled with a yield differential still in favor of the USD will be providing an offset.
• USD/INR is a touch firmer in early dealing, the pair prints at 82.43/44 as the rupee follows broader USD/Asia trends on Thursday. Yesterday the pair printed its highest level since early April, strong US data boosted the greenback and rising Oil prices weighed on the rupee. Equity inflows from Foreign Investors remain strong, there have been ~$2.66bn in flows in May thus far. The data calendar is empty for the remainder of the week.
• Elsewhere in SEA, USD/PHP is back below the 56.00 level, as the markets awaits the BSP decision. No change is expected. USD/THB tried to move lower in early trade, but found support, the pair last in the 34.25/30 region.