Russian Aggression Spooks EM Currencies

The escalation of military aggression in Ukraine took its toll on risk assets as Russian President Putin ordered a large-scale invasion, with several Ukrainian cities hit by shelling and missile strikes and Russian troops moving into Ukrainian territory. The Russian offensive outweighed any local developments in Asia, with regional EM currencies pressured by broader flight to safety.

• CNH: Spot USD/CNH was relatively stable. It had a brief look below yesterday's worst levels, printing a fresh cycle low as a result, before returning into positive territory.
• KRW: The won took a beating as participants dumped riskier assets. The BoK left interest rates on hold in a unanimous decision, while warning that inflation will remain comfortably above +3.0% Y/Y for some time.
• IDR: The rupiah went offered amid a flight to safety, with local headline flow providing little of real note.
• MYR: Risk-off flows pushed spot USD/MYR higher, with gains possibly aided by a miss in Malaysian headline CPI print. Inflation slowed to +2.3% Y/Y in January from 3.2% prior, undershooting consensus forecast of +2.5%.
• PHP: Spot USD/PHP advanced towards key resistance from PHP51.500 but has not tested this level yet. Dovish remarks from BSP Gov Diokno, who reiterated that the central bank can wait with policy normalisation to retain flexibility, may have added pressure to the peso.
• THB: Spot USD/THB jumped as broader risk-off flows kicked in. Note that Thailand's Dep PM flagged the escalation of conflict in eastern Europe as a potential inflationary risk.