EM Currencies Hit By Negative Risk Sentiment

Risk sentiment in Asia was broadly negative with elevated coronavirus case numbers and extended lockdown weighing.

• CNH: Offshore yuan is weaker, accelerating losses after Caixin manufacturing PMI missed estimates.
• SGD: Singapore dollar is weaker. There were reports earlier that the UK and Singapore have agreed an MOU for cooperation in financial services while data showed private home prices rose 0.9% in Q2 after a 3.3% rise in Q1.
• KRW: The won weakened, data showed the trade surplus widened to $4.440bn in June from $2.94bn previously, but slightly narrower than expectations. Exports rose for the eighth straight month, up 39.7% and beating estimates of 33.8% while imports rose 40.7% above estimates of 33.6%.
• TWD: Taiwan dollar is slightly stronger. Data from IHS Markit showed manufacturing PMI fell to 57.6 in June from 62.0 previously. On the geopolitical front China's President Xi spoke at a communist party event and said achieving national reunification is party's mission and that China must take resolute action to defeat Taiwan independence.
• MYR: Ringgit is weaker, Malaysia's Markit M'fing PMI deteriorated to 39.9 this month from 51.3, suggesting that the manufacturing sector have entered a sharp contraction. This was the worst reading since April 2020, when the original outbreak of Covid-19 battered the global economy.
• IDR: Rupiah declined, there were reports that emergency Covid-19 restrictions will take effect from Jul 2 - 20. EconMin Hartarto didn't elaborate on the details, but Reuters said a document seen by them noted that containment measures will be applied in Java and Bali.
• PHP: Peso dropped, Philippine Markit M'fing PMI registered at 50.8 this month vs. 49.9 in May, suggesting that the sector is expanding again. Elsewhere, the unemployment rate eased to 7.7% in May from 8.7% seen in Apr, on the back of upticks in both employment and participation.
• THB: Baht bucked the trend and posted some gains after hitting a multi-month low yesterday. Thailand's Markit M'fing PMI improved to 49.5 in Jun from 47.8 prior, falling short of returning above the breakeven 50 level. IHS Markit noted that the latest wave of Covid-19 infections "kept Thailand's manufacturing sector in contraction for a second straight month as demand and production fell".