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USD/Asia Print Cycle Highs Despite Another Stronger-Than-Expected PBOC Fix


The Fed's decision to raise interest rates by 75bp and flag a steeper tightening path going forward kept the U.S. dollar afloat, while sapping strength from Asia EM FX. A stronger than expected PBOC fix failed to arrest yuan depreciation, while focus turned to monetary policy reviews by Bank Indonesia and Bangko Sentral ng Pilipinas.

  • CNH: Offshore yuan extended losses after the PBOC set its yuan reference rate 850 pips below sell-side estimate. This extended the current streak of firmer-than-expected fixings to a record 21 days, albeit the actual mid-point was set at a new cyclical high of CNY6.9798. Spot USD/CNH showed above the CNH7.1 for the first time since 2020.
  • KRW: Spot USD/KRW crossed above KRW1,400 for the first time since 2009, inviting a fresh round of verbal interventions from South Korean officials, with FinMin Choo vowing to take all necessary measures to tackle one-sided FX moves. The won paced losses in the Asia EM basket, cementing its position as the worst regional performer this year.
  • IDR: The rupiah was the most resilient currency in emerging Asia, but spot USD/IDR still printed its best levels since 2020. Focus was on the imminent rate decision from Bank Indonesia, with the Board of Governors expected to raise the 7-Day Reverse Repo Rate by 25bp.
  • MYR: USD/MYR refreshed 24-year highs with post-FOMC impetus dominating ahead of tomorrow's CPI data to be released out of Malaysia.
  • PHP: The peso plunged to all-time lows in the interim between the Fed's policy review and the today's rate decision from the BSP. Governor Medalla said the central bank "will do what's necessary to achieve a target-consistent inflation path," as the policy rate is still "accommodative."
  • THB: Spot USD/THB showed at its highest point since 2006 as participants awaited more details on the planned meeting between BoT and MoF officials to discuss currency depreciation.

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