FX Update: Moderate weakness in the yen and the pound
FX Update: Moderate weakness in the yen and the pound has characterized early-week trading so far. The yen nudged lower against the dollar and euro, tracking a rise in U.S. Treasury and Bund yields, which were accompanied by gains in Asian and European stock markets to complete a risk-back-on picture. USD-JPY printed a two-session high at 106.66, returning last week's two-week peak at 106.97 back into scope, and EUR-JPY also lifted into two-session terrain. The pound took a rotation lower during the London morning session. Cable posted a low at 1.2116, which is 56 pips down on the day's peak. Friday's low is at 1.2085. EUR-GBP printed a high at 0.9164, which put some added distance in from the three-week low seen on Friday at 0.9090. The dip in the UK currency, which comes after it posted a rare up week last week, was a reaction to a Sunday Times report detailing a leaked a government document assessing the impact of a no-deal Brexit on the UK economy, which warned of food and medicine shortages, among other potential horrors. Elsewhere, EUR-USD settled near 1.1100, consolidating gains seen on reports that Germany will shift to deficit spending should the country enter recession.