USD Firms On Mixed Equity Trends, Less Supportive Flows

The USD has drifted marginally higher against Asia FX. Overall dollar gains have been modest but supported by a more mixed regional equity backdrop and inflow picture. Spot THB has bucked this broader trend but is away from best levels. Still to come later today is Taiwan Jan export orders, along with the Q4 BOP. Tomorrow, the data calendar is very light for the region.

• USD/CNH has maintained tight ranges, not drifting far from the 7.2100 level. Local equities are higher, albeit amidst a volatile trend. Volatility continues to decline ahead of the upcoming 'Two Sessions'. Later on in the week we get official PMI prints for March.
• 1 month USD/KRW has been equally range bound. The pair last near 1329.5, little changed from end NY levels on Monday. Local equities are weaker, but this hasn't weighed on the won materially. Data out has focused on retail sales and short term external debt, both of which haven't shifted the sentiment needle.
• 1 month USD/IDR has drifted higher, albeit to sit slightly below session highs in latest dealings. The pair was last near 15670. For the 1 month NDF we are now back above all key EMAs. The 20-day is nearby at 15655, but hasn't been an important inflection point. The 100-day near 15575 has seen support emerge on dips close this level back to early Jan this year. Cross asset headwinds have emerged somewhat for the rupiah, with global equity momentum stalling somewhat in recent sessions, while US real yields hold sticky, the 10yr close to +2.00%. 5yr CDS has edged up from recent lows, last close to +70bps.
• Spot USD/PHP sits within Feb ranges, last tracking near 56.06. This leaves Peso little changed for the session. We are comfortably above recent lows 55.70, but late Jan highs, just above 56.50 are some distance away. Key EMAs are all clustered close to spot, 55.90 to 56.02. It's a similar story for simple MAs as well. More broadly, PHP remains the third best performer in the EM Asia space 2024 to date, after HKD and INR. The BSP's high policy rate likely aiding the currency relative to others in the region as Fed cut expectations have been pushed out.
• Spot USD/THB is 35.92 in recent dealings, up from session lows, but still 0.50% stronger in baht terms. Onshore markets were closed yesterday, and we ended last Friday at 36.11. Moves above 36.00 have not been sustained in Feb. There may be official resistance to moves above this level. Since last Friday, the USD index has moved off recent highs, which has likely helped at the margin. Gold prices, which have tracked higher as well is another positive. We aren't too far away from the 20-day EMA, which sits near 35.816.