In The Shadow Of The Fed

The greenback has recovered some of its post-FOMC fall, but is still nursing significant losses. Post dovish Fed euphoria has supported a risk on tone and most USD/Asia EM crosses are lower.

• CNH: PBOC fixed USD/CNH 6.4859, just 5 pips above sell side estimates. Offshore yuan weakened, giving back some of the gains seen as the greenback dropped. Oblique tensions between the US and China continue to bubble below the surface, China said today that it would not compromise with US over sovereignty, a response to warnings from the US over Taiwan. Markets await comments from the US-China meeting in Alaska today.
• SGD: Singapore dollar has weakened during the Asia session, giving back some of the gains seen post-FOMC, but still around 80 pips below pre-announcement levels. The rate is sandwiched between its 100-day and 200-day moving average.
• TWD: Taiwan dollar has weakened during today's Asia session. Markets look ahead to the Taiwan Central Bank rate announcement expected after 0830GMT/1630HKT today. The bank is expected to keep rates on hold, key rate currently 1.125%, while markets will be looking for a response to Taiwan potentially being branded currency manipulators by the US due to its intervention in FX markets.
• INR: The rupee is stronger, forward rates for March and April have risen as banks convert USD into INR ahead of financial year end. Gains are limited after a dovish interview with RBI Gov Das.
• KRW: The won is higher and is currently the best performing currency in Asia, the BoK delivered a statement following the FOMC meeting and subsequent market reaction, it said will take steps to stabilise FX and financial markets if needed
• MYR: Ringgit has gained, PM Muhyddin unveiled a MYR20bn stimulus package (Pemerkasa) yesterday, which includes a MYR11bn fiscal injection. As much as MYR3-5bn will be spent on accelerating the vaccination programme to bring the immunisation target forward to Dec 2021 from 1Q2022.
• IDR: Rupiah gained, markets look ahead to the BI's monetary policy meeting later virtually all analysts expecting Bank Indonesia to leave their benchmark interest rate on hold and many calling an end to the current easing cycle.
• PHP: Peso is higher, picking up from three week lows, former BSP Dep Gov Guinigundo, who said that "monetary policy today has done its share and should now focus on stronger monitoring," while "BSP should conserve its ammunition considering that inflation seems to be on an uptrend." Elsewhere, central bank said it'll build up its foreign reserves to maintain a buffer against external shocks.
• THB: Baht is stronger for the first session in five, Thai Health Ministry official said that once 60% of the population is vaccinated against Covid-19, the local outbreak of the disease should be under control.