USD Rally Pauses But Cautious Tone Limits Gains In EM Asia FX

China's return to markets after a five-day break was underwhelming, equities were lower while fixed income was supported by broad risk aversion, the greenback paused a two-day rally.

• CNH: An inside day for offshore yuan, USD/CNH has moved slightly higher from opening levels as equity markets sold off. A fairly uneventful yuan fixing, the PBOC fixed USD/CNY at 6.4536, just marginally higher than sell side estimates of 6.4529.
• SGD: Singapore dollar strengthened marginally, USD/SGD last down 6 pips at 1.3281, downside is capped by $860m of options expiring at 1.3250 today.
• TWD: Taiwan dollar strengthened, the Taiex outperformed again after reports that the US has enlisted Taiwan's help to ease auto chip shortage.
• KRW: Won edged higher, but upside was limited by some coronavirus caution with cases over 600 for the second day.
• INR: Rupee is flat, oscillating around neutral levels in broadly directionless trade. Equity markets in India are also struggling for direction. At 72.75 USD/INR is within touching distance of cycle lows at 72.57
• IDR: Rupiah weakened ahead of the BI rate announcement later today, a cut is expected. Elsewhere Indonesia has mandated Covid-19 vaccines for eligible citizens.
• MYR: Ringgitt has weakened slightly, moving in a tight range through the session. Market looks ahead to inflation data next week.
• PHP: Peso weakened, USD/PHP last trades at 48.40, below yesterday's highs but on track for its third day of gains. Implied volatility rose to the highest in a month.
• THB: Baht weakened slightly but USD/THB failed to make it through resistance at 30.20. The BoT downgraded growth forecasts yesterday.