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Price Action Rangebound Despite BoK Hike, Strong Chinese Trade Report

ASIA FX

Hawkish Fedspeak did the rounds across Asia, with most USD/Asia crosses holding tight ranges. The rupiah lagged behind its regional peers.

  • CNH: Spot USD/CNH has stuck to a narrow range, as the PBOC set their yuan reference rate just 15 pips above sell-side estimate, which represents a moderation from yesterday's 60-pip deviation. The redback also turned a blind eye on China's trade data, which showed that monthly trade surplus hit an all-time high in Dec, while both imports and exports for the entire 2021 printed record highs, generating an annual trade surplus of $676bn.
  • KRW: The won showed a very muted reaction to the monetary policy decision from the BoK. South Korea's central bank raised the benchmark interest rate by 25bp to 1.25%, with one dissenter voting to keep it unchanged. The Bank noted that they expect CPI to be above mid-2% this year, while Gov Lee suggested that the policy rate would not be at a contractionary level even if it reaches 1.50%.
  • IDR: The rupiah was among the worst performers in the Asia-Pacific, as regional players digested hawkish Fedspeak.
  • MYR: Spot USD/MYR snapped its five-day losing streak and crept higher after a failure to penetrate its 200-DMA on Thursday.
  • PHP: The peso held a fairly tight range, even as the Philippines reported its highest daily Covid-19 case count on Thursday since the outbreak of the pandemic.
  • THB: The baht traded on a marginally firmer footing, cementing its position as the best performer in the Asia EM basket this week.

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