USD Finds Fresh Support

USD/Asia pairs are higher across the board, as fresh China covid headwinds weigh.

• USD/CNH is around +0.50% above closing levels from last week, last close to 7.1650. China asset sentiment has faltered today amid rising Covid restrictions in major cities. Equities are lower, although losses haven't accelerated since the open. The USD/CNY fixing came out only modestly below expectations, which has also aided the USD/CNH bid. As expected, the LPR rates were left unchanged.
• USD/KRW 1 month NDF is up over 1%, but has found some selling resistance around the 1355 region, which is fresh multi-week highs for the pair. Onshore equities are down by over 1%, while November partial trade data showed export growth continuing to fall (in y/y terms). Spill over from higher USD/CNH levels was also evident.
• USD/THB is back above 36.00, last 36.07. We are still wedged between the 100 and 200-day MAs. Covid set backs in China risk delaying a further recovery for the local tourism sector. Q3 GDP did beat expectations, rising 1.2% q/q, versus 0.8% expected, amid a broad domestic demand recovery.
• USD/IDR is pressing higher, last at 15713, +25 figs for the session, amid broad USD gains in the region. Early November highs close to15750 could be eyed. The BI Governor stated the central bank expects 2023 GDP growth to be 4.37%, which is close to the consensus (4.9%). Inflation is forecast at 3.61%, below consensus at 4.4%.
• USD/MYR is higher, the pair last around 4.5640. We did spike as high as 4.5877 in the early part of the session before paring gains. Election uncertainty, following the weekend's hung parliament result, is weighing on sentiment. The Malaysian King has set a 2pm deadline (local time) for lawmakers to inform their choice of Prime Minister.