Yuan Lags In The Region

Asia EM FX was a mixed bag to start the week, equities in the region were in the green but weak data out of China sapped some of the risk appetite in FX.

• CNH: The yuan was the underperformer in the region after weak official and Caixin PMI's. The PBOC injected CNY 98bn for the second session, which helped alleviate liquidity concerns and bought repo rates down from multi-year highs.
• SGD: USD/SGD up around 8 pips at 1.3298 having briefly forayed above 1.33. There could be tailwinds for SGD, forward points up to 6-months have all risen for USD/SGD in 2021.
• TWD: USD/TWD still above the 28 handle, the pair has risen slightly through the session. Data on Friday showed bumper GDP, while PMI' from the region were strong today.
• KRW: Won strengthened slightly, data from the region was strong with exports and PMI both beatings estimates, but USD/KRW failed to dip significantly.
• IDR: USD/IDR steady in early trade this week, shrugging off improvement in local PMI data, CPI printed below estimates, while foreign tourist arrivals dropped 88% in December.
• PHP: USD/PHP edged lower, establishing itself under its 50-DMA following the release of the latest Markit M'fing PMI reading and the Finance Dept's update on BoP surplus.
• THB: Thai baht strengthened, the loosening of coronavirus restrictions overshadowed a deterioration in Thailand's Markit M'fing PMI, which suggested that the manufacturing sector has returned into contraction.