Most Asia Currencies Gain, US Stimulus Plans Eyed

A mixed session for Asia FX, the greenback held most of its losses from Friday while positive comments surrounding US stimulus efforts helped engender a broad risk on tone. Volumes have been reduced as market participants prepare for the LNY holiday, with several market closures in the region.

• CNH: Offshore yuan is holding gains from Friday, USD/CNH last down 67 pips at 6.4526. Data over the weekend showed China's forex reserves declined in January after touching a four-year high the previous month. A spokesman for China's SAFE said the decline in reserves was due to a decrease in the value of non-USD currencies and asset price changes, as the dollar index strengthened.
• TWD: Taiwan dollar has weakened through the session, USD/TWD last at 27.992. Markets await trade balance data after market where exports are expected to post double digit growth for the fourth consecutive month. Thin volumes with no stock and bond trading until after LNY.
• KRW: Won has strengthened, posting the first gain in three days. South Korea announced the easing of social distancing rules over the weekend. Restaurants, coffee shops and gyms outside Seoul will now be allowed to stay open until 10pm. Daily coronavirus cases fell below 300 on Monday, marking the lowest number since last November, when a third wave of outbreaks began.
• INR: After dropping to the lowest level since March 2020 post-RBI on Friday INR rebounded and has posted gains in early trade on Monday, supported by gains in the Nifty and Sensex.
• IDR: Rupiah gained, Indonesia's FinMin said GDP was estimated at 4.5% -5.5%. Bloomberg reported that Indonesia will extend its Covid-19 curbs through Feb 22, focusing on specific areas.
• MYR: The ringgit is higher, data showed Malaysian industrial production rose 1.7% Y/Y in December against a 1% decline expected. Manufacturing sales rose 4.5%.
• PHP: Peso gained but failed to consolidate below 48.00. House Speaker Velasco said he had submitted a PHP 420bn pandemic relief bill.
• THB: Baht squeezed out some gains. The Thai gov't said in a statement that it won't procure Covid-19 vaccines through the WHO's Covax programme for now, because of the strict conditions associated with the scheme.