Optimism Surrounding Recovery Prospects Lends Support To Asia EM FX

Overnight greenback sales coupled with optimism surrounding improving Covid-19 situation and economic recovery prospects across the region applied pressure to most USD/Asia crosses.

• CNH: USD/CNH spiked higher despite the apparent absence of coinciding headline catalysts. The PBOC had earlier delivered another softer than expected yuan fixing, missing sell-side estimate by 10 pips.
• KRW: The won went bid from the off, with spot USD/KRW playing catch up with overnight greenback weakness. South Korea's ruling Democratic Party and FinMin Hong sparred over the former's cash handout proposal.
• IDR: The rupiah firmed as Bank Indonesia reported stronger retail sales performance in October, while the government struck an optimistic note on economic recovery prospects for Q4. Spot USD/IDR tested its 50-DMA but struggled to stage a clean break below that moving average.
• MYR: USD/MYR slipped on the back of broader market impetus coupled with the announcement that Malaysia and Singapore will reopen two-way quarantine-free travel on one of the world's busiest air routes.
• PHP: The peso garnered strength after the release of Philippine blowout GDP report for Q3, which showed that the economy expanded considerably faster than forecast, defying Covid-19 countermeasures implemented by the government. Spot USD/PHP pierced its 100-DMA and printed levels not seen since Sep 17.
• THB: The baht was the best performer in the region, as Thailand's daily Covid-19 cases fell to the lowest level since Jul 7, while the government discussed purchasing Covid-19 antiviral drugs. Spot USD/THB plunged through its 100-DMA to the lowest point since Sep 13.