ForexLive Asia FX news wrap: China props up risk

Author: Eamonn Sheridan | Category: News

Forex news for Asia trading Thursday 5 September 2019

Brexit news was again the early focus as the UK Parliament voted down the Prime Minister's wish for an early election. The number of votes in favour was not even close to what was required, giving Johnson another solid defeat. GBP continued its climb, cable topping out a few hours later circa 1.2260. News came out later that it appears all legislation to put a stop to a no-deal Brexit by October 31 will be completed by 5pm Friday (London time). Let's see how that goes, there are still two days of business to be done in the UK ahead of then.

SForex news for Asia trading Thursday 5 September 2019

After this the Asian timezone settled into familiar doldrums with small movement only across forex. Some excitement came from a delay to beginning of U.S. Treasury trading in Asia on BrokerTec, which has a majority share of the daily electronic Treasury trading (according to BrokerTec, anyway). Curiously, there were also system issues affecting the HK exchange today.

The calm was blown away though when China's Commerce Ministry reported that US - China trade talks would resume in early October. Vice Premier Liu He spoke with the US' Mnuchin and Lighthizer on Wednesday on a phone call. Lower-level trade teams will begin preparations from mid-September for the minister-level meeting in Washington to follow next month. 

'Risk on' was the move, not just in forex, with equities moving higher also. AUD/JPY, the risk 'barometer' added on gains with a higher AUD/USD and higher USD/JPY. USD/CHF also a gainer as the Swiss saw a continued unwinding of risk hedges. NZD is a few points higher also.

EUR, CAD, GBP did not join in much, if at all. Gold fell back a few dollars. Oil dropped in the US afternoon on the inventory report surprise (see bullets above). 

Market hopes for progress on US-China relations have been dashed time and again and I suspect they will be again but for today its all sunshine and lollipops. 

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