Won Leads Losses Ahead Of Chuseok Holidays

Most USD/Asia crosses remained on the front foot due to the afterglow of strong U.S. retail sales data released yesterday, with market holidays in China and South Korea eyed next week.

• CNH: USD/CNH popped higher but gradually retraced that uptick, returning to neutral levels. The PBOC set their central USD/CNY mid-point at CNY6.4527, 7 pips above sell-side estimate, and injected net CNY90bn via OMOs, citing the need to keep liquidity stable ahead of the quarter-end. Note that China will observe a public holiday through Tuesday, with another week-long holiday coming up at the beginning of October, while the ongoing Evergrande saga continues to inspire concerns over repercussions for liquidity.
• KRW: South Korean markets are also set to shut in the early part of next week, owing to the upcoming Chuseok holiday. Local health officials fear a potential flare-up in Covid-19 cases, as the festive season is typically associated with higher travel activity. The won was the worst performer in the Asia EM basket, as cautious mood lingered. Spot USD/KRW printed its best levels since Aug 20, when it hit the latest cycle peak.
• IDR: The rupiah started on a softer footing but managed to recoup losses. USD/IDR tested its 200-DMA but failed to stage a convincing break above that moving average.
• MYR: The ringgit was among the weakest performers in the region, as the currency played catch up with market flows seen yesterday, when onshore markets were closed in observance of Malaysia's birthday.
• PHP: USD/PHP gave away its initial gains. The Dept of Health said that Metro Manila will remain under Alert Level 4 (under the new 5-level system) through the month-end, even as OCTA Research Group reported a dip in the virus reproduction rate in the capital region.
• THB: Spot USD/THB registered its strongest levels since Aug 24, holding gains after a firmer reopen. Daily Covid-19 cases rose for the third straight day, with participants assessing health risks related to the planned reopening of Bangkok and several other regions in October.
• SGD: USD/SGD crept higher, having a look above yesterday's high. Singapore's non-oil domestic exports data were mixed, as a miss in headline figure was coupled with a beat in electronic shipments.