USD/CNH Firms On Weaker Equity Tone As 5yr LPR Held Steady

Most USD/Asia pairs have gravitated higher today, with USD/CNH rebounding from the low 7.3000 region, due to weaker equity sentiment post the steady 5yr LPR decision. THB has outperformed though, while USD gains have been relatively modest elsewhere. Taiwan export orders are still to come later today. Tomorrow, we get South Korea consumer confidence, along with Indonesia's Q2 BOP.

• USD/CNH has pushed above Friday session highs. We sit at 7.3260/70 currently, against an earlier high of 7.3283. Lows were close to 7.3020 in earlier dealing. Some disappointment around the 5yr LPR being held steady (the economic consensus looked for a 15bps cut) has weighed on local equity sentiment. This has spilled over to CNH FX, but we would expect reasonable resistance on any move into the 7.34/7.3500 region, which marked highs from last week.
• USD/THB has shrugged off a weaker than expected Q2 GDP print, which also saw the officials revise down their 2023 growth estimate, to track at fresh lows for the session. The pair last near 35.25, around 0.35% stronger in baht terms versus closing levels from the end of last week. Recent highs come in around 35.60, while the 20-day EMA is just under 35.00. Tomorrow the PM vote is expected, with Pheu Thai expected to announce the parties backing its PM candidate ahead of the vote.
• Spot USD/HKD is just a touch below recent highs, last near 7.8345. The broad uptrend in the pair has been maintained. Friday lows around the 7.8250 region were supported. Late June highs aren't too far away, which come in around 7.8390, beyond that is earlier June highs around 7.8440, then the top of the peg band at 7.8500. On the downside, the 200-day EMA is near 7.8300, the 100-day at 7.8265.• A move back below the 20-day, near 7.8200, is likely required to unwind current bullish momentum. Spill over from higher USD/CNH levels has also been a factor today.
• USD/INR is a touch softer this morning however the pair is holding above the 83 handle in early trade on Monday. The pair extended gains seen in early August rising ~0.3% last week as broader USD trends dominated flows. We sit a touch off the highest level since 20 Oct 22. Moody's affirmed India's rating at Baa3, the lowest investment grade score. The outlook remains stable. The docket is empty this week with no data due.
• The SGD NEER (per Goldman Sachs estimates) sits a touch off its highest level since 10 Aug, we sit ~0.7% below the top of the band. USD/SGD is holding a narrow range below the $1.36 handle, broader USD trends continue to dominate flows in recent sessions. Wednesday's July CPI print provides the highlight this week, headline CPI is expected to tick lower to 4.2% Y/Y and Core to 3.8% Y/Y. Industrial Production on Friday rounds off the week, a fall of 4.4% Y/Y is expected.
• USD/MYR prints at 4.66510/4.6550, the pair is little changed from Friday's closing levels in a muted start to today's dealing. The pair sits a touch off its highest level since mid-July as August's gains are consolidated in a narrow range on Monday. USD/MYR is up ~3.3% in August. July CPI headlines this week, a downtick to 2.1% Y/Y is forecast. Also on the wires is Aug 15 Foreign Reserves which crosses tomorrow.