USD/CNH Rebounds, INR Outperforms

It has been a mixed session for USD/Asia pairs, as the market awaits the US CPI print later tonight. Cross asset signals have been positive in terms of higher equities and lower UST yields, but has only had limited positive spill over to the FX space.

• USD/CNH looked set to break below 6.9100 early, but negative covid headlines and concern around consumer holiday spending weighed at the margin. The pair has pushed back above 6.9250. The CNY fixing was again firmer than expected, but less so compared to last week.
• USD/KRW couldn’t get much beyond 1372 in early trade, rebounding back to 1376/77. Onshore equities are up strongly (+2.6%), but this is largely catch up after onshore markets were closed for the past 2 sessions. The South Korea authorities will continue to monitor FX markets closely.
• USD/INR is tracking to fresh multi-week lows. The pair was last at 79.10/15, around 0.50% down on yesterday's close. Chatter of possible Indian bond inclusion in global indices is aiding sentiment, while onshore equities are +0.5% up at this stage.
• Spot USD/IDR has added 21 figs and last deals at IDR14,863 as the rupiah underperforms its peers from the Asia EM basket despite positive cross-asset signals. Comments from FinMin Indrawati, who urged Bank Indonesia to remain cautious while tightening monetary policy, may be weighing on the IDR.
• USD/PHP is down from earlier highs. The pair is back close too unchanged at 56.86. President Marcos extended the state of calamity related to the COVID-19 pandemic by another three months but also signed a decree making mask wearing optional outdoors. The Philippines was one of the last countries in Asia which required masking up outdoors.