Baht Weakens As BoT To Hold Policy Briefing Next Monday

Most USD/Asia pairs sit higher in both spot and 1 month NDF terms, slightly underperforming the steadier trends seen in terms of the USD indices. THB and PHP have been the weakest performers, with baht falling after the BoT stated it will hold a policy briefing next Monday. USD/CNH has been well behaved holding close to end Tuesday levels for much of the session. Tomorrow, we have the BoK decision, no change is expected. Thailand consumer confidence is also due, along with Malaysian industrial production.

• USD/CNH got just above 7.1870 in earlier dealings, but didn't breach Tuesday highs. The pair last tracked at 7.1850 little changed for the session. Easing calls continue, with our China policy team noting we could fresh stimulus action soon (see this link). Such talk hasn't boosted aggregate equity sentiment at this stage.
• 1 month USD/KRW has been relatively steady, not drifting far from end Tuesday levels in NY. The pair was last 1318/19, little changed. Onshore equities are weaker, in line with the regional trend (ex Japan). Earlier data showed a bounce in the unemployment rate, suggesting the best of the labor market conditions may be behind us.
• The Philippine peso has continued to lose ground, USD/PHP last at 56.35, fresh highs back to early Nov last week. We have dropped more than 1% in the past two sessions. Today's wider trade deficit figures weighed, but the price action may also reflect a more hands off approach from the BSP from an intervention standpoint, which was hinted at recently by the Governor.
• USD/THB has pushed to fresh highs this afternoon. The pair is in the 35.15/20 region, 0.6% weaker in baht terms. Fresh weakness has followed headlines that the BOT will hold a 'BOT Policy Briefing' on the 15th of Jan, so next Monday. This comes ahead of a meeting between PM Srettha and BoT Governor, which is scheduled to get underway shortly. Earlier in the week the PM called for rate cuts given Thailand's inflation and growth backdrop.
• USD/IDR spot and the 1 month NDF have both gained around 0.25% to 0.30%. Spot is back in the 15565/70 region. The broader equity backdrop isn't helping, although local shares are higher today. Sticky US real yields will be another headwind.