Stock Sentiment Seeps Into Asia

Sentiment was lifted by back to back gains in US stocks, regional equities gained and most USD/Asia FX crosses declined.

• CNH: Yuan weakened, dropping from positive territory following a drop in Caixin services PMI which followed weaker official and Caixin manufacturing PMI. The PBOC drained a net CNY 80bn of liquidity.
• SGD: Singapore dollar is stronger in Asia trade, USD/SGD down 8 pips at 1.3312, off session lows at 1.3306 with resistance seen at the 1.33 handle which formed a double bottom yesterday. PMI rose to 52.9 in January from 50.5 in December, hitting the highest since April 2019.
• TWD: USD/TWD declined through the session, heading into European hours at 27.944. The intraday rate continues its downward trend and probes new lows, but a close below 28.00 seems out of reach due to swings into the close on touted intervention.
• KRW: The won adds to strength from yesterday, hitting the highest since the middle of last week. South Korea reported January FX reserves of $442.73bn, down from $443.10bn. This is the first decline in 10 months, the won weakened 3% in the period.
• IDR: Rupiah gained, a number of prominent speakers including BI Gov Warjiyo, FinMin Indrawati, Econ Affairs Min Hartarto & Health Min Sadikin will appear at the Annual Mandiri Investment Forum (MIF) 2021 today.
• MYR: Ringgitt weakened following the extension of Malaysia's Covid-19 restrictions yesterday.
• PHP: USD/PHP trades at PHP48.024, a touch lower on the day, narrowing in on the key PHP48.000 figure. The Bank of Investment set a target of PHP1.25tn of project approvals to boost economic growth.
• THB: Baht weakened through the session, Bank of Thailand holds its first monetary policy meeting of 2021 and most analyst expect the Monetary Policy Committee to leave the main policy rate unchanged.