Mixed Into Month-End; Risk Off Mood

A mixed session for Asia FX as the greenback strengthens, with flows distorted heading into month end. The general tone was risk off, exacerbated by some COVID-19 concerns; the South African strain of coronavirus has now been found in the US, while Germany recommended the AstraZeneca jab not be given to over 65's, and there were reports that the Novavax vaccine is less effective against the new variants.

• CNH: The yuan originally built on its Thursday strength, but reversed fortunes midway through the session, USD/CNH last up 41 pips at 6.4784. The PBOC fixed USD/CNY at 6.4709, 38 pips above the 6.4671 estimate. The bank injected a net CNY 98bn via OMOs after draining around CNY 325bn so far this week, money market rates still rose to multi-year highs despite the injection.
• SGD: Singapore dollar grinding lower through the session in cautious trade. A bid in the greenback has pushed USD/SGD to 1.3312. As we head into month end the pair has gained just shy of 0.7%, the biggest monthly gain since March 2020.
• TWD: USD/TWD has risen through the session on Friday, markets look ahead to GDP data at 0800GMT/1600HKT. The Taiwanese economy is expected to have grown 2.55% in 2020, outpacing China for the first time in 30 years.
• KRW: The won strengthened, recouping some of the decline this week. Data from South Korea was strong, headline industrial production rose 3.4% Y/Y vs estimates of a 0.6% decline.
• IDR: USD/IDR has moved away from its 50-DMA attacked yesterday, after the rate failed to consolidate above the moving average. It last sits -21 pips at IDR14,057. Bank Indonesia will offer 1-month domestic NDF at IDR14,111 in an auction.
• MYR: USD/MYR re-opened lower but has more than erased losses, with volatility increased as the pair digested the latest news flow after yesterday's public holiday in Malaysia. The rate last trades +85 pips at MYR4.0535. Moody's affirmed Malaysia at A3 (outlook stable) and said they expect Malaysia's medium-term growth prospects to "remain strong."
• PHP: USD/PHP showed above its 50-DMA yesterday and printed its , but failed to hold onto those gains and retreated. The rate last operates -4 pips at PHP48.075.PPI fell 2.4% Y/Y in Dec after sliding 3.2% in Nov.
• THB: USD/THB has been offered, catching up with overnight greenback sales, despite warnings re: Thailand's growth prospects from one of the FinMin depts. The rate last sits -5 pips at THB29.985.