USD/CNH Rebounds, As HK/China Equities Weaken

USD/Asia pairs are mixed to start the week. For the most part dollar dips have been supported. This has been notable in USD/CNH, amid renewed equity pressures in HK and China. USD/INR and USD/IDR have also tracked higher. KRW is outperforming modestly, while most other pairs are close to flat. Tomorrow, South Korea consumer confidence is on tap.

• USD/CNH tracked lower in early trade, but couldn't sustain the move. After hitting lows of just under 7.2950, we rebounded back towards 7.3100, before finding selling interest. The main source of weakness coming from lower HK and China equities, with renewed property developer concerns weighing on the major bourses (with Evergrande's debt restructuring under a cloud). The CNY fixing was steady, with the fixing error staying near recent record wides.
• 1 month USD/KRW has tracked lower for most of the session. However, the pair has been unable to break meaningfully sub the 1330 level. We last tracked near 1330.50. Onshore equities are weaker, amid on-going outflows but this hasn't dented sentiment so far today. Neither has higher USD/CNH levels.
• USD/IDR spot is drifting higher, last near 15400. Recent highs at 15411 aren't too far away. On the downside, a move back sub 15333 (the 20-day EMA) is potentially needed to shift the trend more positively for IDR. Elevated US real yields, with the 10yr sitting at 2.07%, down slightly from cyclical highs, will be weighing, or at least limiting IDR rebounds. Equally, the market will be mindful of BI intervention with the 15400 potentially acting as a near term resistance point.
• USD/INR is back above 83.10, unwinding all of Friday's rupee gains post the J.P. Morgan index inclusion decision. The pair closed last Friday near 82.90. Local bond yields are lower, but the sell-side is mixed on whether strong bond inflows will lead to meaningful rupee appreciation.
• USD/THB opened on a softer tone, getting close to 35.90, before support emerged. We now sit back near 36.05, a touch higher for the session. Recent highs sit just above 36.30 from last week, while on the downside, recent lows are near 35.63, while the 20-day EMA is ~35.67. The local data calendar is busy this week, headlined by the BoT decision on Wednesday. The consensus is expecting a +25bps to take the policy rate to 2.50%.
• USD/SGD was relatively steady near 1.3660 currently (range today of 1.3652-1.3667) August CPI was close to expectations. Core at 3.4% y/y (3.5% forecast (3.8% prior). Headline was 4.0% y/y, in line with the consensus (prior was 4.1%). The m/m print rose 0.9% (prior -0.2%).