FOMC Minutes Provide Headwind For Asia EM FX, Baht Lags Amid Omicron Worry

Asia EM FX went offered as participants assessed the minutes from the most recent FOMC monetary policy meeting. The document signalled potential for a sooner, more aggressive policy tightening by the Fed.

• CNH: Spot USD/CNH crossed above its 50-DMA despite an above-forecast December reading of China's Caixin Services PMI. Headline index printed at the highest level since May 2021 albeit Caixin flagged a deterioration in business confidence.
• KRW: Spot USD/KRW re-opened higher and had a look above the psychological KRW1,200.00 figure and topped out at levels not seen since Jul 2020. Geopolitical matters helped push the cross higher, as North Korean state media said that Pyongyang successfully test-launched a "hypersonic" missile on Wednesday.
• IDR: Spot USD/IDR advanced amid subdued domestic headline flow, with impetus generated by the FOMC minutes in the driving seat. The rate touched its strongest levels in more than two weeks, approaching resistance from Dec 21 high of IDR14,400.
• MYR: The ringgit faltered along its regional peers. Malaysian headline flow offered nothing to mitigate the impact of aforementioned Fed musings.
• PHP: Spot USD/PHP crept higher, clawing back the bulk of losses registered on Wednesday. Yesterday's move in the peso was somewhat puzzling, given a miss in CPI inflation reported by the Philippine Statistics Authority, but BSP Gov Diokno said that the central bank did not intervene in FX markets.
• THB: The Thai baht was the worst performer in the region amid continued spread of Omicron across the Southeast Asian nation and the gov't's moves to curb soaring pork prices. The Health Ministry raised the Covid-19 alert by one notch to the second-highest level, with officials due to decide on new restrictions tomorrow.