Rupiah Leads Gains, Yuan Nears Cycle Highs

Most USD/Asia crosses crept lower, with the rupiah leading gains in Asia EM space. The baht bucked the regional trend and slipped across the board.

• CNH: Spot USD/CNH threatened to print a fresh cycle low, as the pair hovered just above Dec 8 low of CNH6.3305, its worst level since 2018. The PBOC showed no signs of concern with redback appreciation, fixing the yuan reference rate virtually in line with expectations.
• KRW: Spot USD/KRW oscillated within a fairly tight range, printing a two-week high in the process. The government submitted a draft KRW14tn extra budget to parliament but lawmakers have called for more spending.
• IDR: The absence of notable domestic headlines allowed spot USD/IDR to move on the back of broader market impetus. The rate gapped lower at the re-open and remained in negative territory.
• MYR: Spot USD/MYR edged lower but its 100-DMA proved resilient. Political goings-on drew attention in Malaysia, after the state government of Johor called a snap election to be held within 60 days.
• PHP: Spot USD/PHP moved further away from key resistance located at PHP51.500. The improvement in Metro Manila's Covid-19 situation may have lent some support to the peso.
• THB: There was less optimism about Covid-19 dynamics in Thailand's, as daily infections remain elevated. The baht showed some modest weakness at the start to the week.