Most EM Asia FX Weaker

The dollar index crept higher on Thursday after a flat finish Wednesday. Risk tone was mixed with most asset classes struggling for direction.

• CNH: Offshore yuan is slightly weaker, USD/CNH higher but sticking to yesterday's range. The PBOC injected funds into the system for the first time since March. The Bank set its central USD/CNY mid-point at CNY6.4824, virtually in line with sell-side estimate.
• SGD: Singapore dollar weakened again, on the coronavirus front there were reports in the Straits Times that Singapore is preparing a road map for emerging from lockdowns and life going forward.
• TWD: Taiwan dollar is weaker, hovering around the 28.00 handle after breaching the level for the first time since mid-May yesterday. There were reports earlier that the US and Taiwan would resume trade talks by June 30.
• KRW: The won is stronger, reversing early losses seen at the open after hawkish comments from BoK Gov Lee, he said that it would be appropriate to start normalising policy this year. Elsewhere consumer confidence rose again.
• MYR: Ringgit fell, the World Bank downgraded Malaysia's GDP growth forecast to +4.5% Y/Y from +6.0% Y/Y, owing to the rise in new Covid-19 cases and high hospital bed occupancy rate. Separately, Malaysia's Econ Min Mohamed said that the gov't expects a strong economic recovery in 4Q2021.
• IDR: Rupiah is lower, it has been among the worst performers in Asia, as Wednesday's record increase in Indonesia's Covid-19 case count has weighed on sentiment.
• PHP: Peso declined, Bangko Sentral ng Pilipinas will deliver their latest monetary policy decision today and are widely expected to leave the benchmark Overnight Borrowing Rate unchanged.
• THB: Baht is weaker, markets continue to digest the BoT decision. The Bank left its benchmark policy rate on hold, in line with consensus, while slashing economic forecasts for this year. The Bank now expects domestic GDP to grow 1.8% Y/Y in 2021, after earlier projecting a 3.0% rise, while the 2022 growth forecast was trimmed to +3.9% from 4.7%.