Forex news for Asia trading Thursday 28 May 2020

US/China/HK issues intensified during the US session with Secretary of State Pompeo sending his report to Congress arguing Hong Kong is now under the purview of China and no longer qualifies for special status treatment by the US (that's the in a nutshell version). If this generated much concern in markets it was not too evident with currencies here today during the Asian timezone tracking more or less sideways with an upward hint. (As I update the governing body of Hong Kong have adjourned after rising tensions between pro-democracy and pro-China establishment factions).

EUR was a good performer, testing its overnight high although it has backed off a little since. Cable has not done much.

Forex news for Asia trading Thursday 28 May 2020Title Here

AUD/USD is slightly higher. RBA Governor Lowe spoke in a parliamentary committee hearing today. He was not his usual sanguine self, but he was not overly downbeat either - he emphasised keeping monetary policy accommodative and urged continued fiscal support for the economy. AUD dipped slightly ahead of the main data release for the session but soon recovered. The capex data was not much of a surprise, down (not as much as expected) for the headline, and estimates ahead also lowered in the face of the COVID-19 uncertainty.

The Reserve Bank of Australia did not buy any bonds for its QE program today, this is 3 consecutive weeks now of zero bonds purchases by the Bank.

Stay tuned for expectations China will pass the HK-impacting security law some time today, this will come as no surprise but will confirm the new law. Also a heads up for US President Trump to take action on Thursday (US time) to punish Twitter for flagging his deceptions on the platform.

The PBOC weakened the onshore yuan again today though not by as much as might have been expected. The Bank of Korea cut its benchmark rate to a record low 0.5% and is signalling using other tools such as QE ahead.