USD/CNH Testing 7.2000 Downside Support, As Onshore Equities Surge

USD/Asia pairs are mostly lower. The stronger tone to China equities has helped, with USD/CNH back close towards 7.2000. KRW has also performed well, up nearly 0.5% for the 1 month NDF. Gains have been a little more muted elsewhere. Still to come today is Taiwan CPI figures. Tomorrow, we have South Korea current account figures early, then we have the Philippines unemployment rate. Later on, the BoT decision is due, with no change expected.

• USD/CNH is testing below 7.2000 in recent dealings around 0.3% stronger in CNH terms. Focus remains on the rebound in local equity sentiment, with multiple headlines crossing, most notable surrounding the nations Sovereign wealth fund vowing to increase their holdings in ETFs, while the securities watchdog is encouraging more share buy backs. President Xi is also set to be briefed by the Chinese regulators on Financial Markets, raising hopes of further support/stimulus measures.
• 1 month USD/KRW has fallen in sympathy, the pair last under 1325, around 0.60% stronger in won terms. The Kospi is down 0.75%, but lower USD levels against the majors, coupled with positive spill over from CNH gains is evident.
• USD/THB probed above 35.80 in earlier trade, as comment from the PM pointed to scope for a BoT rate cut of 25bps. There was no follow through and we sit back at 35.66 in recent dealings, around 0.40% stronger in baht terms. Our base case is for no change at tomorrow's policy meeting, which is also the market consensus.
• USD/PHP is lower as well, in line with broader USD trends, the pair last near 56.20. CPI Data for Jzn was weaker than expected, but the BSP didn't suggest a near term policy pivot was imminent post the data outcome.