Won Catches Bid With Korean Finance Ministry On Lookout For Excessive Moves

Most Asia EM currencies outperformed the struggling USD as yesterday's risk aversion evaporated. The won topped the pile as participants digested comments from the Finance Ministry, who pledged to keep an eye on FX markets, monitoring the risk of excessive moves.

• CNH: Offshore yuan picked up some strength and a slightly firmer than expected PBOC fix likely helped USD/CNH extend losses. China's central bank set its USD/CNY midpoint at CNY6.4915, 15 pips below sell-side estimate.
• KRW: Spot USD/KRW pulled back from a fresh YtD high just shy of the KRW1,180 figure as the Finance Ministry took the floor. The pair sold off as Finance Ministry Director Oh noted that the recent upswing in USD/KRW is an overshooting after a short-term demand-supply imbalance including stock sales by foreign investors.
  
• IDR: The rupiah stuck to a tight range, with pent-up risk-off impetus preventing it from firming alongside most regional peers. Indonesian markets were closed for a public holiday on Tuesday.
• MYR: Spot USD/MYR reopened on a firmer footing, but swung to a loss later in the session. Ismail Sabri Yaakob, who is UMNO Vice President and was Deputy PM in the Muhyiddin Cabinet, seems to be the front-runner in the race for prime ministerial nomination.
• PHP: The peso strengthened a tad, before shedding most gains. Participants assessed a Philippine Daily report, which noted that Metro Manila mayors would decide today whether to ease curbs in the capital region, while Manila Times reported that Philippine economic planners would revise macroeconomic assumptions today.
• THB: USD/THB took a dip and narrowed in on support from Aug 13 low of THB33.143. The edited minutes from the BoT's latest monetary policy meeting provided little fresh insight and showed that policymakers deemed financial measures to be more effective in stimulating the economy than another rate cut. The baht shrugged off the second straight record increase in Thailand's daily Covid-19 death count.
• SGD: The Singapore dollar appreciated in sympathy with most of its peers from the region, with USD/SGD unwinding some of its yesterday's gain.
• TWD: Spot USD/TWD printed a two-week high but erased gains thereafter. Taiwan will report monthly export orders and quarterly BoP current account balance later today.