Asia EM FX Await Fed Decision In Quietude

Most Asia EM currencies held steady in the lead-up to the Fed's policy announcement, while another in-line yuan fixing may have helped promote broader stability.

• CNH: Spot USD/CNH slipped under yesterday's low and approached the CNH6.3249 cycle trough printed earlier this week. The PBOC fix matched expectations, despite current redback strength and the approaching Lunar New Year holidays, which will keep the PBOC side-lined.
• KRW: The won started on a firmer footing, before giving away some gains. South Korea's consumer confidence improved this month, despite rising Covid-19 cases. The daily case count hit a fresh all-time high today.
• IDR: Spot USD/IDR clawed back its initial losses. The IMF advised Bank Indonesia to permit more FX volatility, which would preserve monetary policy space. Separately, Bank Indonesia Dep Gov Waluyo said that the central bank will conduct a "pre-emptive, ahead-of-the-curve, front-loading policy mix," although interest rates will remain low until there are signs of building inflationary pressure.
• MYR: The ringgit held steady. Malaysia's PM Ismail Sabri said that the gov't is looking into easing curbs on foreign arrivals.
• PHP: Spot USD/PHP moved further away from the key PHP51 resistance level. The Philippine Statistics Authority revised down Q3 GDP growth to +6.9% Y/Y from +7.1% ahead of the publication of Q4 data on Thursday.
• THB: Spot USD/THB slipped to a new weekly low amid thin local news flow.