Coronavirus Resurgence Engenders Negative Sentiment

Risk sentiment soured on a resurgence in coronavirus cases, most Asia EM currencies lost ground.

• CNH: Offshore yuan is weaker but within yesterday's range and moving a tight band through the session. The PBOC fixed the yuan at 6.4567, in line with sell side estimates. Elsewhere China's GDP growth is projected to reach 12.3% in the first half of the year and 8.8% for full-year 2021 according to Securities Times editorial.
• SGD: Singapore dollar is slightly weaker. On the coronavirus front new cases have dropped, four new cases were found in the past 24 hours which denotes the lowest since June 11. The vaccination drive is accelerating which officials have said is helping contain the number of cases.
• KRW: The won is broadly flat, hugging a narrow range through the session. Late on Monday President Moon said the economy is expected to grow 4% this year, well above the previous estimate of 3.2%. He noted the recovery will be driven by exports and also pointed to a healthy fiscal position thanks to the recovery and cited a surplus of over KRW 30tn in tax revenue.
• TWD: Taiwan dollar is stronger, reversing Monday's decline. On the coronavirus front there were 60 new cases in the past 24 hours, there were reports from the health minister that more doses of the Moderna vaccine will arrive on Wednesday.
• MYR: Ringgit is weaker, PM Muhyiddin announced a MYR150bn economic assistance package, which includes MYR10bn to be disbursed in direct cash aid by the end of the year. The gov't has also unveiled a six-month debt moratorium for all borrowers regardless of income group.
• IDR: Rupiah is weaker, The Straits Times ran a source report suggesting that Indonesia is preparing to implement a "hard lockdown" from tomorrow.
• PHP: Peso bucked the trend and squeezed out some gains. The gov't announced that General Community Quarantine restrictions in Metro Manila and adjacent provinces will be extended through Jul 15, with less stringent rules in the rest of the country left unchanged. Vaccine czar Galvez suggested that the Philippines will intensify vaccination efforts to 8mn jabs a month.
• THB: Baht is weaker, USD/THB has pierced the psychological THB32.000 figure amid a broader baht rout, printing best levels since mid-May 2020. The combination of tighter restrictions in Bangkok and the spectre of continued political unrest in the country has been cited as a factor sapping strength from the baht.