Won Leads Regional Currencies Higher Amid Greenback Weakness

Emerging Asian FX outperformed the greenback amid continued reassessment of risks from the Omicron variant, with regional headline flow offering little in the way of outright drivers of price action within the space.

• CNH: Spot USD/CNH tested yesterday's low, with offshore yuan shrugging off localised lockdowns imposed by some Chinese cities. Beijing's pledge to boost investment to stabilise growth & a stronger than expected PBOC fix may have lent some support to the redback, while the DXY lost some altitude.
• KRW: Geopolitical matters failed to rattle the Korean won, which outperformed all regional peers. The KRW stayed strong even as North Korea test-launched an apparent ballistic missile for the second time this year. Recall that FinMin Hong told his ministry to closely monitor FX markets yesterday.
• IDR: Spot USD/IDR extended its recent sell-off, even as Bank Indonesia noted that retail sales growth slowed into the end of 2021. Worth noting that Indonesia suggested it might relax restrictions in Java and Bali, while the Investment Ministry allowed some coal vessels to set sail and vowed to review the current export ban on Wednesday.
• MYR: Spot USD/MYR went offered. Malaysia's overall wholesale & retail sales rose to a fresh record in November, according to data from the Department of Statistics.
• PHP: The peso garnered some strength, even as the Philippines' trade deficit widened more than expect, while Health Sec Duque warned against the rapid surge in new Covid-19 infections.
• THB: The baht was the second-best performer in the region, despite concerns over the local Omicron outbreak. BoT Gov Sethaput judged that the economic recovery might be fragile, albeit the central bank is prepared for worst-case scenarios.