BNM Still To Come, China Inflation In Focus Tomorrow

Today has seen range bound backdrop for USD/Asia pairs, ahead of key offshore event risk (ECB later this evening).

• USD/CNH sits around 6.9700 currently, after a rough range of 6.9585-6.9775 so far today. The CNY fixing was again stronger than expected today. China's domestic covid situation remains a headwind, while onshore equities have underperformed broader gains in the region today. Tomorrow August CPI is on tap, with CPI expected at 2.8% y/y (2.7% prior), while the PPI is expected to moderate further (3.2% y/y forecast versus 4.2% last month).
• USD/KRW has oscillated around the 1380 level. The BoK Deputy Governor repeated recent warnings around one-sided FX moves, while USD/TWD is slightly lower (30.915). Both currencies have supported by higher onshore equities at the margin.
• USD/MYR is back at 4.5000, with the BNM still ahead. The market consensus rests with a 25bps hike (see our preview for more details).
• USD/THB is lower, back under 36.505, likely aided by lower oil prices. There still appears firm resistance ahead of 37.00. The Thai court will meet on September 14 for the PM's term limit case.
• Lower oil is also benefiting INR. USD/INR is back to 79.75, onshore equities higher by +0.7% so far, while the 10yr bond yield is back under 7.10%, fresh multi month lows.
• USD/PHP is holding close to recent highs, last 57.20. A dip in the unemployment rate (to 5.2% from 6%) not aiding onshore sentiment.