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In-Line PBOC Fix Brings Short-Lived Reprieve To Yuan

ASIA FX
BulletEM BulletEmerging Markets

The yuan showed some volatility around the PBOC fix in a generally mixed session for USD/Asia crosses.

  • CNH: Offshore yuan briefly strengthened as the PBOC set the mid-point of permitted USD/CNY trading band virtually in line with sell-side expectations. The uninspiring fixing came on the heels of fairly strong weak bias (~100 pip deviation) displayed by the PBOC on Wednesday. While this return to normalcy signalled the PBOC's measured approach in managing yuan moves, resultant redback strength proved short-lived. Spot USD/CNH staged a dynamic rebound, rallying to its best levels since Oct 6.
  • KRW: Spot USD/KRW crept higher, despite solid preliminary trade data released out of South Korea. Shipments grew 16.9% Y/Y in the first 20 days of the month, driven by buoyant demand for semiconductors.
  • IDR: The rupiah firmed at the margin, struggling to find notable catalysts. Indonesian Planning Min Monoarfa said the government targets 2023 GDP growth of +5.3%-5.9% Y/Y.
  • MYR: Spot USD/MYR continued its sharp rally, but failed to take out yesterday's multi-month high of MYR4.2915. Malaysia's CPI data will hit the wires tomorrow.
  • PHP: Spot USD/PHP edged lower. Philippine FinSec Dominguez said that the authorities are watching the pace of policy normalisation in the U.S. as they are drafting their own stimulus withdrawal plans. He also outlined ambitious growth targets, pointing to the need to reduce debt burden associated with Covid-19.
  • THB: The baht weakened, but stayed within a familiar range. Spot USD/THB printed fresh multi-month highs on Wednesday.
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The yuan showed some volatility around the PBOC fix in a generally mixed session for USD/Asia crosses.

  • CNH: Offshore yuan briefly strengthened as the PBOC set the mid-point of permitted USD/CNY trading band virtually in line with sell-side expectations. The uninspiring fixing came on the heels of fairly strong weak bias (~100 pip deviation) displayed by the PBOC on Wednesday. While this return to normalcy signalled the PBOC's measured approach in managing yuan moves, resultant redback strength proved short-lived. Spot USD/CNH staged a dynamic rebound, rallying to its best levels since Oct 6.
  • KRW: Spot USD/KRW crept higher, despite solid preliminary trade data released out of South Korea. Shipments grew 16.9% Y/Y in the first 20 days of the month, driven by buoyant demand for semiconductors.
  • IDR: The rupiah firmed at the margin, struggling to find notable catalysts. Indonesian Planning Min Monoarfa said the government targets 2023 GDP growth of +5.3%-5.9% Y/Y.
  • MYR: Spot USD/MYR continued its sharp rally, but failed to take out yesterday's multi-month high of MYR4.2915. Malaysia's CPI data will hit the wires tomorrow.
  • PHP: Spot USD/PHP edged lower. Philippine FinSec Dominguez said that the authorities are watching the pace of policy normalisation in the U.S. as they are drafting their own stimulus withdrawal plans. He also outlined ambitious growth targets, pointing to the need to reduce debt burden associated with Covid-19.
  • THB: The baht weakened, but stayed within a familiar range. Spot USD/THB printed fresh multi-month highs on Wednesday.