USD Dips Supported

USD/Asia pairs are steadier today, in line with fairly tight ranges observed in the G10 space. USD/CNH tried to break lower in early trade, but saw dollar support emerge. Regional equity markets are mixed. Most other pairs sit above session lows, as the USD has firmed modestly as the session progressed. Still to come is Indian CPI and IP prints. Tomorrow, South Korean trade prices print early, then Hong Kong PPI and IP later.

• USD/CNH has tracked recent ranges so far in Tuesday trade. The pair got to 7.2926 in early trade and just ahead of the CNY fix. This was around lows from Monday's session. The fixing was again stronger than expected, but the error was narrower than yesterday's record wide. This coupled with some earlier HK equity market weakness took USD/CNH back towards 7.3100. We now sit back closer to 7.3070, with HK and China equities struggling for positive ground, albeit away from lows.
• Spot USD/HKD sits back at 7.8310, which is above session lows (7.8283), but maintains the recent track lower in the pair. We are now back close to mid August levels. The pair has breached the 20-EMA (back near 7.8355), while current levels are right on the 200-day EMA. Note the 50 and 100-day EMAs sit close to 7.8300. A firmer HKD spot backdrop continues to be underpinned by firmer Hibor fixings. The 1 month rose 33bps to 4.62%, while the 3 month set near 4.82%, +16.5bps. The US-HK 3 month yield differential continues to track lower, last near +59bps, we were near +100bps back in late August.
• USD/INR continues to see-saw around the 83 handle with little follow through on moves as Indian CPI (due today) and US CPI (due tomorrow) come into view. In early trade today USD/INR has opened a touch below the 83 handle and last prints at 82.95/96. August's CPI print today headlines this week's docket, CPI is expected to tick lower to 7.10% Y/Y remaining above the RBIs inflation band for the 2nd consecutive month. Also due this evening is July Industrial Production, which is expected to print at 5.3% Y/Y. The prior read was 3.7% Y/Y.
• USD/MYR prints at 4.6750/75, the pair is ~0.1% firmer today as the Ringgit is marginally pressured in early trade. On Monday the pair finished dealing a touch lower, narrow ranges continue to persist and there has been little follow through on moves in recent dealing. Malaysian Prime Minister Anwar Ibrahim signalled that the Southeast Asian nation may be considering additional taxes to boost state revenue and meet the target of almost halving the fiscal deficit by 2025. The domestic data docket is empty for the remainder of the week.
• The SGD NEER (per Goldman Sachs estimates) is little changed in early dealing on Tuesday, the measure sits well within recent ranges and is ~0.6% below the top of the band. USD/SGD fell ~0.4% yesterday as broader greenback trends dominated flow, the pair found support below the $1.36 handle and sits a touch above the figure in early trade today. A reminder that the local docket is empty this week.
• USD/PHP has reversed an earlier firming trend. We were last near 56.69, little changed for the session, while earlier highs were at 56.785. It keeps us firmly within ranges seen in September so far, roughly 56.50/57.00. Yesterday's USD weakness hasn't flowed through into the peso to any great extent, with USD/PHP modestly above levels from the end of last week. The focus remains on resistance at 57.00, which remains a potential intervention point by the authorities.