USD/CNH Hits Fresh Highs Before Retracing

USD/Asia pairs have mostly been sold on upticks today. USD/CNH made a fresh high above 7.0800 before correcting lower. Most other pairs have also tracked lower, albeit to varying degrees. THB is the standout in SEA. Tomorrow, the main focus will be on central bank decisions in both South Korea and Indonesia, no change is expected from either CB.

• USD/CNH got to fresh highs above 7.0800 post the CNY fixing outcome, which again was close to expectations. However, we have steadily lost ground since, last back under 7.0600, not too far away from early levels on Tuesday. USD/CNY also spiked higher, but now sits back under 7.0500. There didn't appear a direct catalyst for the move, although China equities are away from earlier session lows.
• 1 month USD/KRW has broadly followed USD/CNH so far today. The pair got to 1318 in early trade, but we now sit back at 1314. Yesterday's lows came in around 1306, so we remain above those levels for now. Onshore equities have recovered from earlier losses and now sit slightly higher for the session.
• USD/THB has moved away from recent highs. The pair slipped to a low just under 34.45, before stabilizing somewhat, last around 34.50. Yesterday's highs came in just above 34.70. Baht gains so far in the session are around 0.50%.• There don't appear any fresh catalysts for today's pull back. In terms of the local political backdrop, Move Forward have stated they will tone down its push to reform the monarchy to get the support they need in parliament to get Pita chosen as PM. Current PM Prayut Chan-o-cha also said assured the nation of a smooth transition from the caretaker government to the new government.
• The SGD NEER (per Goldman Sachs estimates) is little changed this morning, we remain within recent ranges. We now sit ~0.8% below the upper end of the band. USD/SGD prints at $1.3460/70, the pair is ~0.1% softer today. Rallies in recent sessions have met resistance ahead of $1.35 handle with the 200-Day EMA coming in at $1.3511. Core CPI held steady at 5.0% M/M in April, a rise of 4.7% M/M was expected, and is above the MAS forecast for 2023. Headline CPI ticked higher to 5.7% M/M, the prior read was 5.5% M/M.