USD/CNH Through 7.1100, PHP Outperforms On Intervention Rhetoric

Outside of a few pockets, the USD has remained on the front foot. CNH has hit fresh cyclical lows, while INR has traded to fresh record lows against the USD. Elsewhere USD dips have been mostly supported. Looking ahead, the main highlights for next week are the BoT decision (due next Wednesday). On Friday the RBI decision is due, along with China PMI prints.

• USD/CNH traded above 7.11, before selling interest emerged. Onshore spot has largely kept pace with USD/CNH moves. Spot got beyond +1.5% above the fixing rate, which hasn't happened too much over the past decade (see this link for more details).
• USD/KRW has edged higher in the 1 month space, back close to 1410. Onshore equities are down 1.7%, with offshore investors strong sellers of local equities (-$356.8mn).
• USD/TWD is at fresh cyclical highs, following yesterday’s modest 12.5bps rate hike. The pair is now close to 31.70 (last 31.682). Onshore equities are not as weak as the Kospi though.
• USD/INR is above 81.00, following yesterday's sharp rally higher. We are seeing INR unwind some of its recent NEER outperformance.
• The Philippine peso outperforms in emerging Asia as BSP Gov Medalla rattled the FX intervention sabre and signalled more rate hikes may be on the horizon after yesterday's 50bp increase. The pair was last at 58.365, up from earlier session lows around 58.30.
• USD/IDR was last at 15033, +15 figs on yesterday's close. IDR has outperformed at the margin, following yesterday's larger than expected BI hike (+50bps). The decision was taken "as a front-loaded, pre-emptive and forward-looking measure to lower inflation expectations and return core inflation to the 3.0%±1% target corridor in the latter half of 2023, while simultaneously strengthening exchange rate stabilisation policy."
• USD/SGD remains sub 1.4200 for now, last 1.4188. Inflation data just released was stronger than expected, strengthening the case for another MAS tightening in mid-October.