Risk Sentiment Reverses

Most Asia FX started the session on the back foot as global concerns surrounding the pandemic sapped kept risk appetite subdued, but hopes for a US stimulus package helped turn risk sentiment around and saw most Asia FX get into positive territory for the day.

• CNH: Yuan has strengthened as the greenback pulls back. PBOC fixed USD/CNY at 6.4816, in line with sell-side estimates. The pair is lower on the session but remains within Friday's range after a sizable jump from 6.4650 to just shy of the 6.50 handle.
• SGD: CPI was flat on the year against expectations for -0.1%, core was weaker than expected at -0.3%. Market looks ahead to further data later in the week.
• TWD: Taiwan dollar is one of the few Asia EM FX that has retreated against the greenback after Chinese military aircraft made incursions into Taiwan airspace.
• KRW: The won managed to change its fortunes during the session, clawing back losses to head into the close in positive territory. There were reports that the South Korean ruling party were seeking cash handouts to citizens as a stimulus effort, and would compensate SME's for their losses.
• IDR: Rupiah gained, data showed that Q4 foreign direct investment rose 5.5% Y/Y, BOI officials pledged to keep rates low and said they planned more transparency to improve policy transmission.
• MYR: Ringgitt is the worst performer in Asia after reports that the government is preparing to shut down most of its economy if coronavirus cases continue to rise.
• PHP: USD/PHP re-opened higher and came into contact with its 50-DMA for the first time since mid-Nov, but a failure to stage a clean breach of the aforementioned moving average was followed by a pullback.
• THB: Baht strengthens modestly on the session, data showed foreign tourist arrivals slumped to 6.7mn from 39.9mn recorded in 2019, with Dec arrivals printing at just 6,556. Meanwhile the AstraZeneca jab was approved by the local regulator.