Commodity-tied FX underpinned by China........>

FOREX: Commodity-tied FX underpinned by China pledge

-AUD and NZD gains extended through the European morning, allowing AUD/USD to

add to its recent recovery and re-target the 50-dma at $0.7309. Gains in

antipodean FX followed comments from Chinese Premier Li, who vowed not to

weaponize the CNY in the escalating trade war - a move that would put Australian

and Kiwi exporters at a disadvantage.

-GBP joins AUD and NZD at the top of the pile as UK inflation spilled higher,

rising at 2.7% year-on-year vs. expectations of a fall to 2.4%. MNI's PINCH

model brought forward its BoE policy expectations to Jun19 from Aug19 pre-data.

GBP/USD touched $1.3215, the highest since mid-July.

-Modest risk appetite continues for a second session, with haven FX CHF and JPY

slipping lower, along with the greenback. The dollar index remains anchored to

the 100-dma and will need a momentum pick-up in either direction to drive price

action today.

-US housing starts and building permits due at 1230GMT and ECB's Draghi speaks

at the 'Making Europe's Economic Union Work' conference in Berlin.