Lower In Risk-Off Trade

Most Asia EM currencies fell in broad risk off trade as coronavirus concerns dominate the narrative.

• CNH: offshore yuan is weaker with no domestic catalysts evident, USD/CNH climbed to its highest point in ten days, even as the PBOC fix was marginally stronger than expected by sell-side analysts.
• SGD: Singapore dollar is weaker as COVID-19 cases hit an 11-month high. As a result authorities have reimposed stricter measures for dining-in just days after relaxing them and closed nightlight venues.
• KRW: Won is weaker for the first session in four. There were 1,252 new cases in the past 24 hours, meaning cases have been over 1,000 per day for two weeks.
• TWD: Taiwan dollar is weaker, health authorities said the soft lockdown likely will not be extended past the end of this week. TWD could be under pressure from dividend remittances with foreigners expected to convert a large portion of the local currency dividends they are set to receive this year.
• MYR: Ringgit declined, Malaysia's daily count of new Covid-19 infections has eased over the last few days, reaching its lowest point in a week on Sunday. Selangor remains the main contributor of new cases, but Dep PM Ismail Sabri said last Friday that the authorities wouldn't extend enhanced restrictions in the state.
• IDR: Rupiah is lower, Minister Luhut who coordinates emergency Covid countermeasures said that the decision on whether to extend curbs in Java and Bali will be announced in the next few days, while Detik reported that the cabinet approved an extension through the end of July last Friday. As a reminder, Indonesia will observe a religious public holiday tomorrow.
• PHP: Peso fell and is the worst performer in the region, the Philippines detected the first case of the Delta variant of the coronavirus last Friday, which may have weighed on local sentiment at the start to a new week.
• THB: Baht declined, tighter restrictions implemented recently failed to contain the virus, which prompted the authorities to propose even stricter Covid-19 rules through Aug 2 and expand them to three new provinces (Chon Buri, Chachoengsao and Ayutthaya). Stricter curbs in the Greater Bangkok Area and elsewhere are expected to take effect on Tuesday.