Risk-Off Flows Sweep Through Asia EM Space

Risk aversion dominated at the start to the week in Asia amid expectations of hawkish resolve from the Fed as well as concerns over the state of China's economy and a range of geopolitical risks.

• CNH: The yuan went offered across the board after Chinese Premier Li warned of "complicated and grave" situation in domestic labour market. The redback ignored another firmer than expected PBOC fix, with the USD/CNY reference rate set 39 pips below sell-side estimate. Spot USD/CNH advanced to a fresh cycle high of CNH6.7475.
• KRW: Spot USD/KRW traded on a slightly firmer footing. Over the weekend, North Korea conducted a test of a submarine-launched missile, ahead of Tuesday's inauguration of South Korean President-elect Yoon.
• IDR: Spot USD/IDR crept higher ahead of the release of local GDP & CPI data. Bank Indonesia's Director Susianto said the central bank was committed to be in the market to stabilise the rupiah if needed, but will prioritise market mechanism in managing the FX rate. Onshore markets re-opened after a week-long closure.
• The MYR went offered as risk-off flows took hold, which allowed spot USD/MYR to lodge a new cycle high. Cautious feel also sapped strength from THB, albeit spot USD/THB failed to re-test May 3 cycle high.
• INR: The rupee tumbled to an all-time low as the risk switch was flicked to off.
• Financial markets in the Philippines were closed for the Election Day.