Yuan Leads Gains Amid Recovery In Sentiment, Baht Lags Behind

Market sentiment stabilised as the dust settled after the discovery of the Omicron coronavirus variant. The yuan led most Asia EM FX higher, albeit the baht lagged amid worrying prospects for the tourism sector.

• CNH: Spot USD/CNH went offered despite a marginally softer than expected yuan fixing. The recovery in broader risk appetite applied pressure to the pair.
• KRW: Spot USD/KRW printed a fresh seven-week high in early trade, but pared gains as mood music improved. South Korea's Vice FInMin said that officials will monitor markets on a 24h basis and stand ready to take pre-emptive and aggressive stabilisation measures if needed.
• IDR: Spot USD/IDR pared its initial gains amid stabilisation in risk sentiment. Local headline flow was rather limited.
• MYR: Spot USD/MYR operated in close proximity to neutral levels, as participants awaited the release of Malaysia's trade data.
• PHP: The Philippine peso gained alongside most of its regional peers. The Philippines expanded its "red list" by several European countries, after banning entry from a number of African nations.
• THB: The broader tightening of border restrictions in a bid to contain the spread of the Omicron variant undermined the baht, amid concerns that the tourism industry could take another hit. Spot USD/THB hit a fresh seven-week high.