Forex news for Asia trading Tuesday 23 June 2020

The session in Asia was shaping up as a slow continuation of the overnight US move where the USD fell, risk currencies and equities gained. But it was soon much more exciting than that.

Trade adviser to President Trump Pete Navarro was interviewed on Fox, where he stated clearly re the trade deal with China: "Its over":

Risk trades took a hammering, AUD/USD dropped from around 0.6920 (it had been a touch higher, above 0.6935) to lows under 0.6860 with other currencies moving similarly, lower against the USD. Equities and equity index futures were pummelled also.

There was a bit of two-way around the lows and then Navarro denied the deal was over, saying his comments were taken out of context. (As an aside, they were not taken out of context, the link to the interview is in the post here:

and he was perfectly clear: "Its over").

Risk trades roared back, AUD/USD for example back to its earlier session highs and recoveries elsewhere also.

White House Economic Adviser Kudlow scrambled to defuse the situation, confirming the trade deal was very much still in place, and even Trump himself tweeted the deal was intact.

Other news and data flow was non-impactful. We had preliminary PMIs from Australia (much improved) and Japan (improved but a mixed set of results).