Yuan Lags Peers After Soft PMI

The greenback struggled for direction and DXY printed worst levels in two weeks as it tested its 50-DMA, most Asia EM currencies therefore managed gains despite mostly risk off sentiment in the region.

• CNH: Offshore yuan heads into Europe flat, USD/CNH crept higher before giving away most gains. The rate showed a muted reaction to a miss in China's official Non-M'fing PMI, which unexpectedly flipped into contraction.
• SGD: Singapore dollar is stronger, though USD/SGD has stayed above yesterday's low of 1.3440. There were 147 new coronavirus cases in the past 24 hours, above 100 for the seventh day.
• TWD: Taiwan dollar is stronger USD/TWD lower for the sixth session out of the past seven. The increase yesterday was the biggest one-day gain in six weeks as the rate played catch up with a weaker USD and TWD benefitted from foreign inflows into the Taiex.
• KRW: Won is stronger, benefitting from industrial production data and the announcement of an expansionary 2022 budget that represents an 8.3% increase on this year.
• MYR: Markets closed for National Day.
• IDR: Rupiah is higher, Pres Widodo announced an extension to Covid-19 restrictions through Sep 6, while loosening curbs in some localities, after the daily nationwide case count fell to the lowest point since Jun 3.
• PHP: Peso rose, BSP Gov Diokno told reporters that the central bank expects consumer-price inflation to settle within +4.1%-4.9% Y/Y range this month. Higher LPG, electricity and food prices as well as peso weakness are seen as key drivers of inflation, but may be offset by cheaper oil and lower rice prices to some degree.
• THB: Baht is stronger, Thailand reported its lowest daily count of new Covid-19 infections in more than a month and the lowest number of deaths in two weeks. There are a slew of Thai data releases coming up today, including BoP current account balance and trade balance