USD/CNH Continues To Correct Lower, Mixed Trends Elsewhere

USD/Asia pairs are mixed, despite a softer USD/CNH tone. Some consolidation following strong gains last week, looks to be at play, while equity trends have also been mixed throughout the region. Still to come is the meeting between China President Xi Jinping and US President Biden in Bali (9:30am BST). India inflation also prints later, expected to come in at 6.70% from 7.41%. Tomorrow the focus will be on the China MLF, no change in rate expected, along with October monthly activity data for China.

• USD/CNH has been sold on rallies. The pair got to 7.1130 in early trade before dipping close to 7.0200 this afternoon. This is just above early October lows (near 7.0100). We are now back around 7.0500. China equities are higher, but down from best levels. Fresh stimulus/support for the property sector is aiding sentiment, which is coming on the heels of changes to some Covid restrictions. This suggests the authorities are getting more serious about improving the growth backdrop.
• USD/KRW 1 month couldn't sustain levels sub 1310 and was last near 1323/24. Onshore equities are higher, but only at the margin. Last week's 6.4% rally in the won was the best since late 2008, so we may be seeing some consolidation today, particularly with the USD firmer against the majors post some hawkish Fed comments at the start of the session.
• USD/INR is higher in the first part of trading, last just shy of 81.10. The pair is wedged between the simple 50-day MA (81.31) and 100-day (80.32) for now. Inflation is expected to have eased in October, with RBI Governor Das expecting a move sub 7% y/y, following weekend comments.
• USD/IDR last sits unchanged in spot terms, 15495, with the pair recovering from an earlier dip. Later this week, Bank Indonesia will announce its monetary policy decision Thursday. Most economists expect a 50bp hike to the 7-Day Reverse Repo Rate, but 8/28 in a Bloomberg survey have pencilled in a 25bp move.
• Spot USD/PHP last changes hands +0.10 at 57.36. Bulls look for a return towards the 59 all-time high, while bears eye the 100-DMA at 56.915 for initial support. Bangko Sentral ng Pilipinas is due to announce its monetary policy decision this Thursday. The Monetary Board is expected to deliver the promised 75bp rate hike, matching the latest move by the Fed.
• Spot USD/THB has remained heavy after the largest drop in years seen last Friday. The pair last deals -0.16 at 35.79, with bears looking for a sell-off past the 200-DMA at 35.120, albeit the RSI has now moved into oversold territory. BoT Gov Sethaput said the economy is expected to continue its gradual recovery, despite global slowdown and market volatility. The central bank intends to maintain a measured and gradual pace of rate hikes, while the next rate decision will depend on the overall economic situation.