Post-FOMC Reflections & Chinese Data Take Focus

Currencies from the Asia EM basket struggled for a uniform direction, as the region digested yesterday's monetary policy decision from the FOMC (and resultant risk relief rally) as well as economic data released out of China upon its return from a holiday.

• CNH: Spot USD/CNH slipped as the PBOC's first post-holiday yuan fixing proved firmer than expected, but staged a rebound as China's Caixin Services PMI missed expectations. Survey results showed that China's services sector shrank at the fastest pace since February 2020. The rate eased off its best levels through the rest of the session, but remains above neutral levels.
• MYR: Spot USD/MYR retreated during the first trading session this week, with onshore markets catching up with overnight FOMC policy announcement, with Chair Powell's rhetoric proving less hawkish than expected.
• PHP: Spot USD/PHP moved away from key resistance located at PHP52.500. Peso may have drawn some additional support from local CPI data, which showed that headline inflation accelerated to +4.9% Y/Y in April, beating median estimate of +4.6% and breaching the BSP's target range of +2.0%-4.0%.
• THB: Thailand also returned from a holiday, with spot USD/THB opening sharply lower. Headline CPI inflation slowed to +4.65% Y/Y in April, printing below the median estimate of +4.81%, but participants were aware of potential for renewed acceleration this month, linked to the government's decision to remove a cap on diesel prices.
• INR: The rupee gained after the Reserve Bank of India delivered a surprise rate hike on Wednesday citing the need to tame inflation.
• Financial markets in South Korea and Indonesia were closed in observance of respective public holidays.