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Risk appetite has improved amid tentative steps towards deal in Brexit negotiations which has spurred risk sentiment in Asia amid holiday thinned trade and a featherlight economic docket.

  • GBP/USD has added a further 38 pips in Asia, Cable sits at 1.3530 as we type. The recent round of tweets from UK reporters suggested that the final text of the agreement is down to the short strokes and negotiations are expected to continue through the night, with an official announcement of a deal expected in the London morning.
  • Improved risk sentiment on macro themes and a rebound in commodity prices has supported AUD & NZD. Both marginally higher in Asia after gaining through the session on Wednesday.
  • USD/JPY recovered in the second half of the day after slipping in the Asia session. The rate was happy to hold the prior day's range in subdued pre-holiday trade, and looks set to do the same today. Flow data showed foreigners were net sellers of Japanese stocks in the latest week, while bond purchases fell significantly in the period, and PPI rose 0.1% in November, down from 0.2%.
  • The PBOC fixed USD/CNY at 6.5361, 197 pips lower than yesterday's fix as the greenback recedes and the redback advances alongside Asia FX.
  • Among Asia EM FX, TWD is the best performer, followed closely by KRW and MYR as most USD/Asia crosses look to snap 3-days of gains.
  • Remaining points of note on today's thin calendar include Canadian building permits, comments from BoJ Gov Kuroda & the latest MonPol decision from the CBRT.