Won Leads Losses Amid Risk Aversion, Yuan Gains After PBOC Fix

Unease with the global spread of the Omicron coronavirus variant dented risk appetite, with participants awaiting this week's monetary policy decisions, including from the Fed, BI and BSP.

• CNH: The deviation between the daily fixing of yuan reference rate and Bloomberg average estimate shrank further to a very narrow margin, convincing watchers that the PBOC have pressed pause on attempts at curbing yuan strength. Spot USD/CNH slipped in the immediate wake of today's PBOC fix and the pair remained heavy thereafter.
• KRW: Spot USD/KRW gapped higher at the reopen and held gains, as the won was the worst performer in Asia. Broader risk aversion coupled with worrying domestic Covid-19 developments (fresh record highs in deaths & critical cases) undermined the won.
• IDR: Spot USD/IDR traded above neutral levels, with participants awaiting Thursday's monetary policy decision from Bank Indonesia.
• MYR: The ringgit extended its recent losses, despite the absence of notable local headline flow. The Dewan Rakyat passed budget 2022 yesterday, sending it to the upper house for final approval.
• PHP: The Philippine peso held a narrow range ahead of this week's BSP Monetary Board meeting. Gov Diokno suggested Monday that the central bank will take a cautious approach to policy normalisation.
• THB: The baht showed some resilience in early trade but gave up eventually. The World Bank said that they see the BoT holding their key interest rate through next year to support the economic recovery.