COVID-19 Fears Abate For Now

Supportive risk sentiment helped Asia EM currencies higher at the open, the greenback did rise slightly which saw most USD/Asia crosses come off best levels.

• CNH: Offshore yuan has weakened slightly with USD/CNH creeping slightly higher, reversing some of Monday's decline. Markets digested comments from PBOC Governor Yang late on Monday, he said the Central Bank would increase credit support to the economy and SME's in particular.
• SGD: Singapore dollar is flat, on the coronavirus front Singapore reported 94 new cases yesterday, the highest case count since August 5 after a cluster of infections was discovered at a foreign worker dormitory
• TWD: Taiwan dollar is stronger, pausing a two day decline thanks to equity inflows as the Taiex posts robust gains. As a reminder late yesterday industrial production rose less than expected at 13.93% while the unemployment rate beat expectations.
• KRW: Won is stronger, there were reports that the national budget for 2022 should be bigger than the KRW 604 trillion earmarked for this year to finance the country's efforts to tackle the COVID-19 crisis. Late Monday the Fin Min said it would take action in the case of excessive volatility.
• MYR: Ringgit gained, hitting its highest in two weeks, new Covid infections dropped to 17,672 on Monday, the lowest in two weeks. New PM Ismail said his cabinet choices will be announced this week.
• IDR: Rupiah is higher, BI announced it would extend its bond buying programme.
• THB: Baht is higher, officials said late yesterday that the latest COVID-19 outbreak has peaked, the infectious disease panel has approved a shift to learning to live with COVID-19 including total vaccination coverage for vulnerable groups and active-case searches.
• PHP: Peso gained, data showed a budget deficit of PHP 121.2 billion in July, revenues rose 9.21%.