Asia Open - Overnight Highlights

EMERGING ASIA

EM currencies are trading individually against the greenback as market participants prepare for the new year. The biggest winners are MYR 0.29%, followed by INR 0.21%, CNY 0.15%, TWD & IDR 0.11%, SGD 0.09% and CNH 0.07%; while the biggest losers are KRW 0.40%, THB 0.22%, THB 0.18% and PHP 0.09%.

USD/CNH is trading lower at 6.9922 from 6.9971 previously closed. Onshore spot market is trading lower at 6.9959 from 7.0060 closed before the national holiday. 12 month NDF diverged from both the on/offshore market and is trading higher at 6.8755 from 6.8713 previously closed.

USD/IDR spot market is trading lower at 16771 from 16788 previously closed. 1 month NDF is trading lower at 16958 from 17016 previously closed.

USD/INR onshore spot market is trading lower at 89.78 from 89.97 previously closed. 1 month NDF is trading lower at 90.09 from 90.30 previously closed.

NA Session

Before the FOMC minutes release the USD edged up and then saw little reaction on the minutes. FX traders were watch 2yr Treasury and only a 1bps decline was seen.  The December minutes leave the impression that the bias is towards more cuts in 2026, but likely after a policy hold in the near-term.  However, this is already discounted in money market futures and attention now switched to the December numbers, with payrolls on January 9.

President Donald Trump comments yesterday also attracting some attention.  The optimism on a near-term Ukraine peace deal is not being shared by the market, with Russia and Ukraine still far apart of territory and the issue of security guarantees.  Any surprise peace deal could help European gas prices lower, which would help a European recovery and the EUR.

AUD drifted lower in the U.S. to reverse gains seen in Asia.  AUD remains one of the favourite picks for 2026, given the RBA could hike as the Fed cuts.  Additionally, attitude towards China and its assets are becoming less negative, while the AUD has lagged other majors in 2025.