FX Update: A risk-off theme propelled the yen higher
FX Update: A risk-off theme propelled the yen higher while the likes of the China-proxy Australian dollar, and many developing-world currencies, underperformed. The Breixt-afflicted pound also posted fresh major-trend lows during a notably thin Asian session (amid holidays in Japan and Singapore) before rebounding some. Cable lifted back above 1.2050 after printing a 31-month low at 1.2015. The UK currency also lifted out of respective 33- and 10-year lows versus the yen and euro. The London Times reported that pro-EU members of parliament are scheming to force the UK government to delay Brexit as a means to avoid a no-deal Brexit. Johnson is reportedly to meet with Irish prime minister in the coming days, too, though it would be highly unlikely that the two would make any substantive progress with regard to the Irish backstop. USD-JPY drifted to a fresh seven-month low, at 105.15, and a 28-month low against the euro, reflecting a rise in the Japanese currency's safe-haven premium as stock markets in Europe and S&P 500 futures sputtered. Concerns of a protracted trade war between the U.S. and China are taking a stronger grip, while the risk of a no-deal Brexit was brought into sharper focus in global markets by UK data on Friday showing an unexpected contraction in Q2 GDP. AUD-USD and AUD-JPY traded lower by over 0.5% and 1%, respectively, though both remained above the 10-year lows that each saw last week. EUR-USD continued to gravitate around 1.1200, which has been the case for a week now. The PBoC set the midpoint of the yuan fix at 7.0211, a new 10-year-plus low, after 7.0136 on Friday. The IMF said on Friday that it considers recent Yuan weakness to be in line with fundamentals, endorsing the PBoC claim.