INR Slips After RBI Decision, Bank Indonesia Up Next

Overnight greenback sales provided a degree of support to Asia EM currencies as onshore markets re-opened, but caution ahead of the release of U.S. CPI kept a lid on gains. The Indian rupee underperformed after the RBI left its reverse repo rate unchanged.

• CNH: Spot USD/CNH erased its initial gains as the DXY slipped in tandem with U.S. Tsy yields. The PBOC fix fell in line with broader expectations.
• KRW: Spot USD/KRW re-opened on a softer footing, but managed to gradually recoup those initial losses. NK News & 38 North circulated reports suggesting that North Korea is preparing a military parade ahead of upcoming holidays. Separately, Pres Moon said that a joint summit with DPRK Supreme Leader Kim & U.S. Pres Biden is "just a matter of time."
• IDR: Spot USD/IDR remained on the back foot despite trimming some of its initial losses. Bank Indonesia will announce their monetary policy decision today, but the benchmark interest rate is expected to remain unchanged.
• MYR: Spot USD/MYR oscillated within a familiar range, in a futile search for any notable catalysts. Malaysia's quarterly GDP data will draw attention tomorrow.
• PHP: Spot USD/PHP extended its pullback from PHP51.500, which represents key resistance re-tested earlier this week. Philippine jobless rate edged higher, albeit amid wider participation, December data showed.
• THB: Spot USD/THB traded on the back foot, as participants weighed Wednesday's BoT monetary policy decision (policy settings unchanged, emphasis on risks from inflation) against continued surge in daily Covid-19 cases, which climbed to a five-month high.
• INR: Onshore rupee came under pressure as the RBI stood pat on interest rates, defying expectations of a reverse repo rate hike (consensus was split, for the record).