Central Banks Steal Limelight

The impact of yesterday's monetary policy decision from U.S. Fed waned through the session, as focus turned to regional central banks and developments on the Omicron front.

• CNH: Offshore yuan meandered around neutral levels. The PBOC provided no surprises today, as its monetary injections matched maturities, while the yuan reference rate was set just 10 pips above sell-side estimate. Local media suggested that the People's Bank could trim their Loan Prime Rates next week.
• KRW: Spot USD/KRW operated in negative territory, as the won benefited from post-FOMC market flows. South Korea's economic officials noted that they do not expect much impact from the Fed decision but stand ready to intervene and stabilise markets if needed. The won gave up some of its initial gains later in the session, perhaps on the back of worrying Covid-19 dynamics in South Korea.
• IDR: Spot USD/IDR clawed back its initial losses. Indonesia confirmed its first case of Omicron and five more probable cases in Jakarta and Manado, albeit Health Min Sadikin said there are no signs of community transmission yet. Bank Indonesia are set to deliver their monetary policy decision today.
• PHP: Bangko Sentral ng Pilipinas are also poised to conclude their meeting today, but like their Indonesian colleagues are expected to leave interest rates unchanged. Elsewhere, Health Sec Duque said that the Philippines will maintain its current Covid-19 response strategy at least through the year-end. Spot USD/PHP held below neutral levels and printed its worst levels since mid-Nov.
• THB: Spot USD/THB crept higher. Little to write home on domestic headline flow, with participants eyeing next week's monetary policy decision from the Bank of Thailand.
• MYR: Spot USD/MYR was rangebound, with participants looking for fresh catalysts.