The two main drivers of the big sell-off in Asia on Friday were rumours regarding Korean capital controls and another rate rise in China. The Shanghai stockmarket fell 5% and certain commodity markets were limit down at various stages. This led to some major risk-aversion in the FX market with the AUD being the biggest loser.
Now in the cold light of Monday morning, we still do not know if these were anything other than rumours. There certainly were no further developments or statements over the weekend. This could mean that we see a partial reversal of the moves that happened on Friday.
