FX Update: The dollar and yen ascended
FX Update: The dollar and yen ascended while the likes of the euro, sterling and Australian dollar were the standout underperformers. EUR-USD and euro crosses tumbled sharply on Italy angst, which drove EUR-USD to a six-week low at 1.1505. The head of economic policy of Italy's ruling Lega party, Claudio Borghi, said that he was "truly convinced that Italy would solve most of its problems it if had its own currency," though a spokesman walked back the remarks by stating that leaving the euro is not the government's policy and that "it has no plans to do so," which helped stabilize the common currency. USD-JPY has ebbed to a two-day low of 113.60, driven by yen outperformance amid a backdrop of souring risk appetite (the Dollar itself has firmed against most other currencies despite losing ground to the Yen). EUR-JPY fell by over 0.5% and AUD-JPY by over 1% at its lows. The Indonesian Rupiah has fallen to a new 20-year low, with Indonesia being one of the emerging economies on the potential-currency-crisis worry list. Markets also seem to be taking a more circumspect view of the "biggest ever" trade deal between the U.S. and Canada. Cable posted a three-week low of 1.2951 and even EUR-GBP lifted moderately despite a backdrop of broad Euro declines. A miss in the September UK construction PMI and the political stalemate that Brexit has become have weighed on the UK's currency.