Risk Aversion Takes Toll On Asia EM FX As Russia Ups Ante In Conflict With Ukraine

Selling pressure hit Asia EM space as a consequence of aggravation of Russo-Ukraine tensions around the Donbas area. Monday saw President Putin recognise the self-proclaimed "republics" in eastern Ukraine as sovereign states and order the deployment of Russian troops into the region.

• CNH: Offshore yuan went offered against the greenback as the Asia-Pacific timezone reacted to escalation in Russo-Ukrainian standoff. China's ambassador to the UN delivered a remarkably brief and unsubstantial statement on the matter, calling for a diplomatic solution of the crisis. Concerns over the local tech sector resurfaced after China told state-owned companies & banks to check their exposure to Ant Group.
• KRW: The won bore the brunt of risk-off flows inspired by Russia's moves re: LPR/DPR, becoming one of the worst performing Asia EM currencies. Local officials pledged to monitor market developments and international security situation.
• IDR: Risk aversion pushed spot USD/IDR higher at the re-open. The rupiah held its initial losses.
• MYR: Likewise, the ringgit remained on the back foot, amid reduced willingness to take risk.
• PHP: Spot USD/PHP moved closer to key resistance from PHP51.500 but fell short of testing that level.
• THB: The baht sold off sharply as a flare up in Covid-19 cases amplified the impact of broader risk-off impetus. Officials raised alert level across the country but said they wouldn't implement lockdowns.