USD/CNH Breaches 7.2000, IDR Extends Rebound

Most USD/Asia pairs are trading with a firmer tone, as USD/CNH briefly traded to fresh highs above 7.2000. The won also continued to unwind some its recent outperformance. IDR was a clear outperformer though, likely aided by the pull back in core yields from Tuesday's session. Tomorrow the focus will be on the BI and BSP decisions, with no change expected from either central bank.

• USD/CNH breached 7.2000 not long after we had a slightly weaker CNY fixing and further HK,/China mainland equity market weakness. Highs were at 7.2007 and we currently track close to 7.1970/80. Calls for further policy remain strong across the board, from a local media standpoint.
• Spot USD/KRW is up nearly 1% so far in Wednesday trade. This puts the pair back in the 1292/93 region. This is highs back to earlier parts of June. Regional equity markets are mostly weaker, with the Kospi off by 0.65% so far today, putting the index back sub the 2600 level. Offshore investors have sold just over $300mn of local shares, bringing week to date outflows close to $1bn. Higher USD/CNH levels (the breach of 7.2000) may also be having an impact.
• The rupiah is bucking the broader trend of firmer USD levels within Asia Pac trade today. After printing fresh highs above 15050 yesterday we sit back around 14955/60 in latest dealings. Spot IDR recovered sharply ahead of yesterday's onshore close, so we are only modestly firmer so far today in terms of spot gains. The 1 month NDF sits just under 14980. Lower core yields through Tuesday's session have likely aided the IDR recovery, although there doesn't appear to be many other cross asset supports.
• The ringgit has weakened in early dealing as broader USD/Asia trends continue to dominate flows. USD/MYR has printed a fresh year to date high last printing at 4.6490/4.6505. The pair is ~0.2% higher today. Malaysia's Economy Minister Rafizi Ramli noted that the government hasn't discussed directly intervening in markets to support the nations currency. Looking ahead, Jun 15 Foreign Reserves cross tomorrow before May CPI on Friday.
• The SGD NEER (per Goldman Sachs estimates) is marginally firmer in early dealing, the measure remains well within recent ranges. We now sit ~0.5% below the upper end of the band. USD/SGD is consolidating recent gains, dealing in a narrow range above the $1.34 handle. The pair last prints at $1.3430/40. Singapore's Energy Market Authority plans to more aggressively regulate electricity markets as price jumps intensify. A reminder that the local docket is empty until Friday's CPI print. Headline CPI is expected to fall to 5.4% Y/Y from 5.7%, and Core CPI is also expected to tick lower to 4.6% Y/Y from 5.0%.
• USD/INR is little changed in early dealing on Wednesday, consolidating above 82 in a narrow range. Foreign investors' inflows into Indian equities continued with $214.26mn on Monday bringing the total in June to date to $1.762bn. A reminder that the data calendar is light with just Q1 BoP Current Account Balance on the wires which is due between today and month end.