USD/INR Testing Simple 200-day MA Support, USD/CNH Above Thursday Lows

USD/Asia pairs have been mixed today. USD/CNH has rebounded somewhat, following a sharp move lower on Thursday on stimulus hopes and broader USD weakness. Spot USD/KRW has seen support again under the 1270 level, which was also evident earlier this week. Other currencies are firmer though, PHP and INR rallying. Spot USD/INR is currently tracking sub the simple 200-day MA for the first time since early 2022.

• USD/CNH has recovered some ground from Thursday session lows sub 7.1200. We got back to a high of 7.1445 (with weaker yen levels post the on hold BoJ weighing at the margin), but now sit around 100pips lower at 7.1330/40. The tone to onshore and HK equities is positive, amid on-going stimulus hopes. There has been some chatter this week a State Council meeting could take place today.
• Spot USD/KRW gapped lower at the open but there appears to be some support under 1270 at this stage. Spot hit a low of 1268.90, but we now sit back at 1275/76, still +0.40% firmer in won terms for the session. 1 month USD/KRW is back to 1273/74, up from NY Thurs lows sub 1270. Onshore equities have rebounded somewhat, the Kospi +0.50%. Offshore equity inflows have only been modest though.
• The Rupee is firmer in early dealing on Friday, USD/INR is down ~0.3% and dealing a touch below the 82 handle. Broader USD trends are weighing on the pair and USD/INR sits at its lowest level since early May. Inflows into Indian stocks from Foreign Investors is aiding the Rupee. In the week to Wednesday the inflows total $421mn. On the wires yesterday May Trade Balance printed at $22.12bn widening from April's $15.24bn deficit. Q1 Current Account Balance is due sometime below today and June 30.
• The Ringgit briefly firmed in early dealing, USD/MYR fell below 4.60 handle however the move did not follow through and the Ringgit now sits a touch weaker on the day. USD/MYR prints at 4.6170/4.6200, the pair is ~0.2% firmer than opening levels and well within recent ranges. Looking ahead the data calendar is empty until Tuesday when May Trade Balance crosses. However next week is highlighted by the May CPI print on Friday.
• Finance Secretary Diokno has stated that the BSP is likely to leave rates on hold at next week's policy meeting. Rate cuts will be considered if there is a significant drop in inflation, with Diokno highlighting the Q1 2024 period as a potential window. Th Secretary also said Q2 growth was likely to be similar to Q1's. In the FX space, USD/PHP is tracking lower, last at 55.85, slightly up from session lows near 55.76. The pair largely remains range bound with moves above the simple 200-day (56.13), drawing selling interest in recent months. Peso bulls will look to target a break sub the 50-day MA near 55.70.
• The SGD NEER (per Goldman Sachs estimates) is a touch softer in early dealing, the measure however remains well within recent ranges. We now sit ~0.6% below the upper end of the band. USD/SGD has fallen to its lowest level since May 17, broader USD flows are dominating, the pair sits at $1.3365/75. The pair is down ~1.2% month to date. To recap from earlier in the session, May export data came in weaker than expected. The m/m printing at -14.6%, versus -1.9% forecast. This is the steepest m/m fall going back to 2012, but the m/m readings can be volatile and we have had positive outcomes in the past two months. The y/y print fell to -14.7% , also well below consensus estimates (-7.7%). Looking ahead, next Friday's May CPI print is the only data of note next week. Headline CPI is expected to fall to 5.4% Y/Y from 5.7%, and Core CPI is also expected to tick lower to 4.7% Y/Y from 5.0%.