USD/CNH Makes Fresh YTD Highs, Most Other USD/Asia Pairs Lower

Most USD/Asia pairs are lower in line with USD softness/weakness in yields in the first part of Friday trade. CNH is a clear exception which fell to fresh YTD lows against the USD. A move higher in the USD/CNY fix and weaker equities are weighing. TWD and IDR are also seeing modest underperformance. PHP has outperformed modestly, with 57.00 representing a firm resistance point at this stage. Later on, Taiwan August trade data is out, while tomorrow China August inflation data is due.

• The move higher in the USD/CNY fix (to 7.2150), saw a spike in USD/CNH above 7.3600, fresh highs for 2022. We aren't too far off 2022 highs of 7.3749. USD/CNY also rose, last tracking near 7.3450, fresh highs back to late 2007. USD/CNH settled back into the 7.3500/7.3600 range post the 7.3612 high, but CNH has underperformed the broader USD sell-off. Some onshore commentary noted CNY may find it difficult to strengthen against the USD in the near term, while China equities are tracking lower at this stage, the CSI 300 off ~0.70%.
• USD/TWD looks to be consolidating gains above the 32.00 level. The pair was last near 32.03, with the pair making fresh highs back to early November last year. Highs last year came in close to the 32.35 level. The 20-day EMA sits back near 31.86. Taiwan equities are modestly tracking lower, down 0.20% so far today, with China looking to expand its iPhone ban in the government sector weighing on Apple suppliers, including TSMC. Offshore investors remain net sellers of local equities, with already nearly $1.1bn in outflows in September to date. For the quarter to date, we are running at -$8.63bn in net outflows.
• USD/IDR spot continues to drift higher, last near 15345, not too far from mid August highs at 15358. A move above this level, could see March highs around 15450 targeted. The 20-day EMA trend is rising, last near 15259. Local lawmakers have told BI to take 'bold but measured steps' to ease borrowing costs, while being mindful of Fed rate hikes. BI's next policy announcement is on Sep 21 and it continues to emphasize financial stability and may be reluctant to turn more dovish with Fed rate cuts not yet on the agenda, particularly with USD/IDR trending higher.
• USD/INR printed fresh YTD highs yesterday edging higher as broader USD trends dominated flows. The pair is holding close to record highs in early trade today, last printing at 83.16/17. Equity outflows continued on Wednesday, a net of $340.94 Indian equities were sold by foreign investors bringing the total outflow for September to ~$570mn
• The Ringgit is little changed in early trade on Friday, ranges have been narrow with little follow on moves. USD/MYR continues to hold in narrow ranges a touch off YTD highs, the pair last prints at 4.6760/90. BNM held the Overnight Policy Rate at 3.00% yesterday as expected. The banks statement dropped a phrase from the previous meeting that had characterised core inflation as “elevated”, the latest reading of core CPI was 2.8%. The bank also cited two-way risks to growth.
• The SGD NEER (per Goldman Sachs estimates) printed its lowest level since July 7 yesterday before paring losses. The measure sits ~0.9% below the top of the band. USD/SGD printed a fresh YTD high yesterday as broader greenback trends dominated flows. In early dealing this morning recent gains have been trimmed, the pair is ~0.1% lower at $1.3640/45. Foreign Reserves ticked lower in August and now sit at $337.25bn, the prior read was $340.79bn.
• USD/PHP has tracked lower in the first part of trade today. We were last at 56.65/70, around +0.25% firmer in PHP terms since the open. The BBDXY is down around 0.15% in the first part of Friday trade, which is helping Peso sentiment. Recent highs rest at 57.00, which remains a clear resistance point for the pair. On the downside, early September lows sit at 56.495, which is also close to the 20-day EMA. On the data front today, we had July trade figures. The deficit widened to -$4.2bn, close to market expectations and wider than the prior -$3.9bn outcome.