USD/CNH Supported On Dips, USD/KRW Breaks Above 1300

USD/Asia pairs are mostly higher, bucking the slightly softer dollar bias seen against the majors. USD/CNH dipped sharply this morning, but recovered just as quickly. 1 Month USD/KRW has broken higher, while PHP and THB have seen further losses. MYR and INR have outperformed at the margins. On Monday next week we get Q2 Indonesia GDP, along with Thailand CPI and China FX reserves.

• USD/CNH dipped sharply in the first part of trade, getting close to 7.1550, but then rebounded just as quickly. This afternoon we got back above 7.1900, but now sit slightly lower. Early impetus came from a strong equity market open, but sit away from best levels now, albeit with major indices still comfortably in positive territory. Comments from officials at the PBoC, NDRC and MOF didn't break any major new ground from a policy stimulus standpoint.
• Spot USD/HKD spent much of yesterday trending higher. We got to highs above 7.8080 late in NY trade, but sit closer to 7.8070 in current dealings, little changed for the session. This is highs in the pair back to July 26. Note the 20-day EMA comes in close to 7.8100, while the 50-day is higher at ~7.8200. The USD/HKD 1 month risk reversal is firming. We were last at -0.32, which is highs in this metric back to February of this year. In the forward space, USD/HKD 12 month outright sits only a touch above recent lows, last in the 7.7660/70 region. Shorter dated tenors have seen more upside in line with spot moves, the 6 month back to 7.7870, the 3 month tracking near 7.8000.
• 1 month USD/KRW has broken higher today. We last sat at 1305/06, with early July highs around 1312.50 not too far away. Local equities are mixed, but have largely tracked sideways since the open. The Kospi is trying to push higher, but offshore investors are net sellers of local equities so far today, -$216.1mn, which brings week to date outflows close to $1bn at this stage.
• USD/INR has opened dealing little changed from Thursday's closing levels in a muted start to today's session. The pair printed its highest level since late May yesterday before paring gains. Reuters have reported that the RBI sold USD on Thursday to cap gains in the pair. Looking ahead, the latest RBI monetary policy decision is due next week, no change to policy is expected.
• The Ringgit sits ~0.2 firmer on Friday, trimming some of the losses seen through the week as broader USD trends continue to dominate flows. USD/MYR prints at 4.5450/90, and remains well within the monthly range, gains have been capped by the 20-Day EMA (4.5642) and the 200-Day EMA (4.5031) has provided support to the pair. Palm Oil sits a touch above the MYR3800 handle, pressure continues on the contract and we now sit ~9% below late July highs. Stockpiles expanded to the largest level in 5 months and production sits at a 7-month high.
• The SGD NEER (per Goldman Sachs estimates) is little changed in early dealing, the measure was pressured yesterday and sits a touch off the base of the recent ranges. We sit ~0.5% below the top of the band. USD/SGD sits a touch above the $1.34 handle and is see-sawing around the handle in narrow ranges this morning, the pair printed its highest level since 11 July yesterday before paring gains. Retail Sales in June printed at 1.1% Y/Y below the 2.1% increase which had been expected.
• USD/PHP is higher today, but the rate of ascent is down on recent sessions. The pair last sat at 55.70, +0.30% higher for the session so far. We did get to 55.75 earlier, but found selling interest around this region. This is very close to the simple 200-day MA (55.76), and a touch above July highs. The pair is already above all key EMAs. Earlier we had weaker than expected July CPI data, although the BSP still sounded cautious around the inflation backdrop. Next week we get June trade figures and Q2 GDP, ahead of the next BSP decision on the 17th of August.
• USD/THB has continued to track higher, the pair last around the 34.75 region. This +0.30% firmer and builds on yesterday's +1.1% gain. The simple 200-day MA sits above 34.80, so isn't too far away from current spot levels.