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Hawkish Fedspeak Supports USD/Asia Crosses


Better U.S. Tsy yields drove USD/Asia crosses higher on Tuesday, with the region digesting the latest round of hawkish comments from Fed Chair Powell, who left a 50bp rate hike on the table.

  • CNH: Spot USD/CNH edged higher, with the in-line PBOC doing little to affect that trend. China's State Council reiterated the pledge to support domestic economy and financial markets on Monday. This would include firmer monetary policy stimulus, albeit without flooding the market with liquidity.
  • KRW: Spot USD/KRW traded sideways after a higher re-open, with the pair generally holding above the KRW1,220.00 figure. South Korean President-elect Yoon vowed to submit a new extra budget to parliament as soon as he takes office if outgoing President Moon fails to propose one now.
  • IDR: Spot USD/IDR pierced the IDR14,350 level on its way to best levels in two weeks. Indonesia removed all quarantine restrictions for vaccinated travellers, while FinMin Indrawati outlined plans to reduce this year's bond issuance target by at least IDR100tn.
  • MYR: Spot USD/MYR rallied to a multi-week high in the absence of notable domestic headline flow.
  • PHP: The peso went offered on the back of the broader regional impetus.
  • THB: The baht retreated to a multi-week low amid rising oil prices.

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