USD/CNH Still Biased Lower, Weaker Equities Curbing IDR

USD/Asia pairs have mostly seen downside traction today, although moves haven't been as large as yesterday. The bias remains for USD/CNH weakness, with onshore spot continuing to lead the way. KRW and THB remain on the front foot and were joined by PHP today. IDR remains a laggard. The data calendar remains light tomorrow, with the South Korean unemployment rate due, along with Malaysian IP figures.

• USD/CNH hit just under 6.7600 before support emerged, the pair last at 6.7735/40. Onshore spot remains firmer in CNY terms, last at 6.7640. The CNY fixing moved back to a firmer bias, although the 5-day trend remained close to neutral.
• USD/KRW 1 month hasn't been able to get below 1235, but moves above 1240 have drawn selling interest. China is suspending some visas for South Korean citizens in response to Korea's entry restrictions against China citizens amid the domestic covid outbreak.
• USD/THB hit fresh lows close to 33.30 in early trade, but we are slightly higher now, back above 33.40. Current levels are still slightly firmer for the session, while the baht comfortably remains the best performer within EM Asia FX to date in 2023, up nearly 3.5%. The baht remains a favored play on the China re-opening theme, with the authorities yesterday walking back a requirement that arrivals need to show vaccine proof. The authorities expect 7-10million Chinese arrivals by air this year, although only modest arrivals are expected in Q1 (~300k). Thailand (along with China), is one of the few EM Asia economies where growth is forecast to be stronger in 2023 relative to 2022.
• The PHP is leading gains among Asia FX so far today. USD/PHP was last at 54.835, -0.55% for the session and fresh lows back to late June 2022. 54.50 and beyond that, 54.00, seem reasonable downside targets if the weaker USD trend continues. On the topside, the simple 200-day MA is at 55.32. Better than expected trade figures has aided peso sentiment, exports rising 13.2% Y/Y for Nov (11.5% forecast), while imports slipped to -1.9% Y/Y (+3.0% forecast). This pushed the trade deficit to -$3.68bn, slightly wider than last month, but below the -$4.13bn forecast.
• USD/IDR is back to 15590, slightly up on the session, although moves closer to 15600 have drawn selling interest. Local equities are underperforming, now down 10% from their September 2022 peak, as a rotational play unwinds within EM Asia equities.