Follow On Gains Limited

Most of Asia FX has struggled to hold onto gains today, outside of PHP. CNH has benefited from a further reduction in Covid restrictions, but there hasn't been much follow through. Still to come is Taiwan trade figures. Tomorrow the data calendar is light with just South Korean current account figures/goods balance, along with Thailand consumer confidence numbers.

• USD/CNH was firmer in the first part of trade, tracking over 6.9900, but dipped towards 6.9600 on reports of a fresh loosening of Covid restrictions. We last sit near 6.9900 slightly weaker for the session. Poor November trade figures haven't done much to dent sentiment, although may have weighed at the margin.
• USD/KRW 1 month pushed above 1325 in the first part of trading, before falling back to 1312 on positive China covid news. Follow through selling has been limited, the pair is back to 1322, as onshore equities remain in the red.
• The RBI hiked as expected, by 35bps, and gave a somewhat hawkish outlook. Local bonds sold off, but there was limited benefit to the rupee. We last sat at 82.55/60 only slightly down from opening highs of 82.67.
• PHP has been the standout, with USD/PHP slumping back 55.50, fresh lows back to mid August. The unemployment dipped to 4.5%, lows going back to 2019. Onshore equities are weaker, but have given up less than a third of yesterday's gains. Focus may rest on a more aggressive rate hike from the BSP at mid-December meeting, particularly after yesterday's inflation surprise.
• USD/THB is fairly steady, holding above 35.00 (last at 35.045). November inflation figures missed from a headline standpoint (5.55% y/y, 5.80% expected), but core rose to 3.22% y/y, slightly above expectations. The Thai finance minister stated that BoT rate rises should be gradual.