USD/CNH Makes Fresh Highs, KRW Continues To Outperform, IDR and THB Softer

Most USD/Asia pairs have traded with a firmer bias, led by USD/CNH, although KRW remains an outlier (along with TWD). In SEA, PHP is doing better, with yesterday's on hold BSP decision not seen as dovish as feared. IDR and THB have continued to weaken though. Looking ahead, China's 5yr and 1yr LPRs are due next Monday, no change is expected. Also out is the first 20-days of South Korean trade data for May.

• USD/CNH has continued to March higher, getting to 7.0750 post the fixing outcome, which was slightly firmer than expected, but not enough to temper bearish expectations. Onshore equities have struggled to gain positive traction. Onshore spot got above 7.0600 in early trade, but now sits back at 7.0460/70. Reuters reported that onshore state owned banks were swapping yuan for dollars, in a potential sign of greater push back on recent depreciation pressures.
• 1 month USD/KRW has traded with a negative bias today, albeit remaining within recent ranges. The pair last around 1329, around 0.35% stronger in won terms versus Thursday's closing levels. Onshore equities have continued to rally, the Kospi up a further 0.80%. Offshore investors have added a further $283.3mn to local shares today, brining week to date inflows to $904.3mn. Spot USD/TWD is also down a touch to 30.72/73.
• USD/IDR is back above 14900, last near 14955, through highs from late April. Indonesian markets returned today after yesterday's holiday, with the pair playing some catch up with higher USD/Asia levels. A break above 14920 may see the market target 14970, highs from early April and beyond that is 15000, round figure resistance. Weaker palm oil prices will be weighing at the margin, while firmer US real yields is additional headwind. The real 10yr is back to +142bps, highs from the first half of March. Portfolio flows are also more modest compared to earlier in the year.
• USD/PHP is holding close to session lows. The pair opened sharply lower hitting 55.665, before moving back into a 55.70/75 range, which is where we last tracked. This is around 1% off recent highs from Wednesday close to 56.25. Earlier May lows came in at 55.55 (May 11), while the simple 50-day MA sits further south at 55.21. The 200-day sits near 56.09, with moves above this resistance point proving unsustainable. Yesterday's BSP on-hold decision was expected, but the market may have taken some comfort from the fact that BSP Governor Medalla said the central bank will resume tightening if necessary (based on data), but the most likely outcome is on hold for the next 2-3 meetings. The market may have been fearful of a more dovish BSP outlook.
• USD/MYR prints at 4.5500/5550, pair rose ~0.3% yesterday printing its highest level since 24 Nov. MYR was pressured yesterday as US Treasury Yields rose boosting the USD. Palm Oil futures fell a further ~1.3% on Thursday and are down ~5% this week although losses have been marginally pared this morning. The April Trade Balance was narrower than forecast, a surplus of MYR12.85bn was recorded vs an expected surplus of MYR21.20bn.
• USD/THB has continued to track higher, last near 34.50, with onshore equities remaining on the back foot, down a further 0.40% towards recent lows near 1500.