Won Leads Losses Amid Risk Aversion, MonPol Matters Under Scrutiny

Familiar themes kept broader risk appetite in check, while participants assessed the outlook for regional central bank policy trajectories.

• CNH: Offshore yuan narrowly outperformed the greenback, with the upcoming LPR fixing already drawing attention. BBG consensus forecast looks for no change to the benchmark interest rate on Monday, albeit some analysts have speculated that the PBOC could deliver a marginal cut.
• KRW: Spot USD/KRW advanced as risk aversion did no good to the Korean won. South Korean finance ministry warned that the flare-up in Covid-19 infections will hurt domestic demand, with tightened restrictions set to take effect this weekend.
• IDR: Spot USD/IDR extended yesterday's rally amid expectation that Bank Indonesia will keep interest rates lower for longer. The central bank kept the 7-Day Reverse Repo Rate unchanged on Thursday, pledging to pursue a "pro-stability" stance going forward.
• MYR: Spot USD/MYR meandered in positive territory, with domestic political affairs providing some interest. The delayed Sarawak state election takes place this weekend, while Malaysiakini reported that some factions within UMNO are pushing for a snap general election.
• PHP: The Philippine peso was a tad firmer following yesterday's monetary policy decision from Bangko Sentral ng Pilipinas. The Monetary Board stood pat on interest rates and raised their inflation outlook for this year and next, while noting that the economic growth "appears to be on firmer ground."
• THB: USD/THB held below neutral levels, with participants preparing for next week's meeting of the Bank of Thailand's Monetary Policy Committee.