FX Update: The Dollar reached the London fixing at mixed levels
FX Update: The Dollar reached the London fixing at mixed levels, up against the Pound, which was the biggest mover in thin trading conditions in the absence of North American markets, while having posted modest declines versus the Euro and holding a near net-unchanged level against the Yen. Cable posted a three-session low at 1.2854, and also traded to three-session lows versus the Euro. The Pound was hit by a double whammy of an unexpectedly weak UK August manufacturing PMI report on the one hand, and on the other a clear-as-can-be clarification from EU's chief Brexit negotiator Barnier that the British government's proposals for a new trade deal is a no-go. EUR-USD settled around 1.1625 after recouping from an intraday foray below 1.1600. USD-JPY saw moderate weakness during the Asian session before drifting higher during the European AM session, remaining near the 111.00 level throughout. AUD-JPY printed a new 20-month after China's Caixin manufacturing PMI fell to a 14-month low and other PMI surveys in Asia highlighted weakening export demand, which hit a nerve given prevailing concerns for the Sino-U.S. trade war (which the Australian economy is particularly exposed to) to continue to escalate. Aside from weakness in China's PMI, the PMI surveys out of Japan and South Korea highlighted slowing export orders.