Weaker USD, But Mixed Degrees Of Follow Through

USD/Asia pairs are off from recent highs, but follow through today has been varied. This has been particularly the case for USD/CNH and USD/KRW (1 month). Baht has been a stronger performer at the other end of the spectrum. Still to come is Taiwan export orders. Tomorrow, South Korea consumer confidence and the first 20-days of trade figures for Feb are due.

• USD/CNH got above 6.8800 in early trade but is now back to the 6.8700 level. Onshore equities are higher amid growth optimism, although the authorities have reportedly told banks to curtail lending following the bumper results in Jan. As expected, the 5yr and 1yr LPRs were left unchanged.
• 1 month USD/KRW drifted lower but hasn't seen much follow through, last around 1293, so only slightly down on NY closing levels from the end of last week. Onshore equities are around flat, while the North Korean missile tests haven't impacted asset market sentiment.
• Spot USD/TWD is back below 30.40, so off recent highs. Coming up is export order data. The market expects a -24.05 y/y print. US-China tensions could remain in focus, as various visits take place this week and potential for a US-Taiwan bilateral trade agreement to be signed sooner than expected.
• USD/HKD has fallen 0.20% to sub the 7.8300 level before support kicked in. This is the firmest HKD move since late lats year and reflects the liquidity drain from last week as the HKMA defended the weak side of the peg (7.8500). Short terms HK rates have shot higher today.
• The RBI is said, link here, to have sold USD via NDF's to prevent USD/INR from weakening past 83 handle on Friday. FX reserves data up to Feb 10, showed reserves trending back lower (back under $567bn), although part of this will reflect the impact of firmer USD levels on valuations. USD/INR has softened in early trade, down ~0.1%, last printing at 82.70/75. This is line with broader USD trends in the region.
• USD/THB is up slightly from session lows, last around 34.36 (-0.70% for the session). The pair got close to the 100-day EMA on Friday (34.66/67), while the 50-day EMA sits near 34.025. The baht is the best performer within the Asian FX space so far today, although part of this is catch up with the weaker USD trend post Friday's onshore close. The USD/THB RSI got close to 70 on Friday (moves above this level on the RSI are considered overbought conditions), so that may have encouraged some profit taking flows in long USD/THB positions.