- Forex today witnessed mild risk-on with Chinese yuan gaining ground against the greenback and JPY crosses on the rise.
- Fed is considering the wait-and-see approach on future rate hikes, according to the Wall Street Journal.
- President Trump agreed with China's Commerce Ministry that a trade deal could be reached within the 90-day period.
Forex today saw mild risk-on action with Chinese yuan pushing higher against the greenback and JPY crosses picking up a bid, tracking mild gains in the Asian equities.
The Dow Jones Industrial Average (DJIA) which was down more than 700 points at one point Thursday, staged a V-shaped recovery after the Wall Street Journal (WSJ) reported that the Fed is considering whether to signal a new wait-and-see mentality at their December meeting.
The late recovery in the US stocks likely put a bid under the Asian equities. Major names like Japan's Nikkei, Shanghai Composite, South Korea's Kospi reported moderate gains. As a result, JPY crosses regained poise.
Notably, the AUD/JPY rose 0.10 percent to 81.69, having clocked a low of 80.93 in the overnight trade.
The risk assets may have also received a boost from Trump's tweet, which China's comments on their commitment to achieving a trade deal.
It particularly helped the CNH (offshore yuan exchange rate) push higher against the greenback. The USD/CNH was looking north, having witnessed a falling wedge breakout in early Asia. The bullish pattern, however, failed after Trump tweeted his take on a trade deal, and the pair fell to a session low of 6.8657.
Meanwhile, the USD/JPY extended its overnight rebound from the all-important 100-day MA support to levels just below 113.00. BOJ's Kuroda ruled out additional stimulus, but at the same time squashed hopes of near-term taper.
Looking forward, the risk assets may cheer Trump's tweet and reports stating that Fed officials are considering signaling a wait-and-see approach on rate hikes next year. As a result, the US dollar may remain on the defensive and JPY crosses better bid ahead of the US non-farm payrolls and wage growth release.
As of writing, the Federal-funds futures used to place bets on the course of rates, show just a 7.9% chance that there will be three rate increases by June 2019, down from 30% a month ago, according to the Wall Street Journal. That rate hike probability would slide even further if the wage growth figure prints well below estimates.
Key news in Asia
- BOJ official: BOJ holds 77.5 percent of Japan's total ETF market
What's brewing in the majors?
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.