Greenback Upswing Drives Most USD/Asia Higher But KRW & THB Hold Firm

A sudden upswing in U.S. Tsy yields provided a tailwind for the greenback, prompting USD/Asia crosses to erase earlier losses. The moves were attributed to continued hawkish Fed repricing, with U.S. markets set to re-open after a holiday.

• CNH: Spot USD/CNH fell to a fresh YtD low, with USD/CNY printing its worst levels since May 2018, but a round of fresh demand for the greenback prompted the pair to trim losses. Calls for cuts to China's benchmark loan prime rates grew louder, drawing more attention to Thursday's fixing, while the yuan reference rate was set virtually in line with expectations.
• KRW: South Korean won remained the best performer in the Asia EM basket, even as spot USD/KRW clawed back the bulk of its initial losses. The BoK called in their monthly report for a stronger monitoring of global capital flows and the FX market, as they see the won weakening despite strong economic fundamentals.
• IDR: Spot USD/IDR bounced back into positive territory, even as Indonesia lifted its ban on foreign arrivals. Participants eyed Bank Indonesia monetary policy decision, due Thursday.
• PHP: Spot USD/PHP narrowed in on resistance from Jan 10 cycle high of THB51.440 and peaked just shy of there.
• THB: Spot USD/THB stayed in negative territory despite the greenback-led bounce off session lows. The baht was bolstered by Thailand's push to reinstate its quarantine-free visa programme for vaccinated travellers.
• MYR: Malaysian markets were shut in observance of a public holiday.