USD Trims Early Losses

The early tone to USD/Asia pairs was to the downside, but this gave way to a more resilient USD backdrop as the session progressed. USD/CNH couldn’t sustain moves sub 7.3000. USD/KRW 1 month couldn’t test sub 1330 elsewhere. Looking ahead next Monday the first 20 days of trade data is due in South Korea on Monday. The 1yr and 5yr LPR rates are expected to be cut in China as well in line with this week’s surprise cuts. USD/CNH got to a low of 7.2825, with sentiment aided by the largest CNY fixing surprise relative to expectations. This proved fleeting though, this afternoon the pair moving back above 7.3050, to be little changed for the session. Local and HK equities tracking back lower weighing as the session progressed.

• 1 month USD/KRW found support ahead of the 1330 level. We are back to the 1336 level now. The rebound in USD/CNH helping broader USD sentiment in the region. Local equities also remain in the red. These moves leave the won within ranges for the past week though.
• The Ringgit has trimmed its losses since in August to date, USD/MYR is down ~0.3% and last prints at 4.6405/50. Broader greenback trends continue to dominate flows in the USD/Asia space, the pair is still ~3% above August opening levels.
• The SGD NEER (per Goldman Sachs estimates) sits a touch off its highest level since 10 Aug, we sit ~0.7% below the top of the band. USD/SGD has ticked lower, as broader USD trends dominate flows. The pair broke back below the $1.36 handle yesterday, extending losses in todays dealing to past print at $1.3560/70. The domestic data docket is empty until next Wednesday when Jul CPI crosses. Headline CPI is expected to tick lower to 4.2% Y/Y from 4.5%, Core CPI is expected at 3.8% Y/Y a downtick from the prior read of 4.2%.