Unscheduled Tightening Shields SGD, PHP From Impact Of Hawkish Fedspeak

Hawkish Fedspeak supported most USD/Asia crosses but off-cycle action from a couple of regional monetary authorities created surprise outperformers.

• CNH: The dollar side was the main driver of USD/CNH as the PBOC fix fell virtually in line with expectations. The rate climbed to a session high of CNH6.7369 before trimming gains.
• KRW: Likewise, USD/KRW advanced to near KRW1,312 before paring some gains. South Korea's Vice FinMin Bang pledged that officials will step up monitoring and actively tackle herd behaviour in financial markets.
• SGD: The Singapore dollar easily outperformed its regional peers after the MAS re-centred the S$NEER policy band higher, effectively tightening monetary conditions. It was the third unscheduled policy adjustment this year, with the next regular review coming up in October. The surprise decision overshadowed below-forecast GDP data released at the same time.
• PHP: The BSP followed suit, announcing an off-cycle 75bp hike to its key policy rate. While some speculated that that MAS could soon tweak policy to address persistent inflationary pressures, the BSP was expected to wait until its August meeting and has only recently put a 50bp hike on the table. The peso appreciated after flirting with all-time lows in recent days.
• IDR and MYR weakened after palm oil futures retreated to multi-month lows as recessionary fears spoiled demand outlook. Spot USD/MYR printed fresh cyclical highs, while spot USD/IDR climbed towards the IDR15,000 mark.
• THB: Baht oscillated near recent cycle lows, with liquidity sapped by a national holiday in Thailand. While local financial markets were open, government offices were shut and many people were off.