Trade optimism supports dollar vs. yen, Australian dollar hikes up

SYDNEY-The dollar inched closer to its six-month high against the Japanese yen as the Australian dollar hit its strongest session since July last Friday, brought heavily by upbeat signals about Sino-US trade deal.

                Positive headlines about the possibility of trade signing decreased demand for safe-haven currencies such as yen. However, with holiday season still in the air, overall trading activity was restrained.

                China disclosed on Wednesday that it is in close communication with US about signing ceremony. Such followed after US President Donald Trump said he and Chinese President Xi Jinping will commence a formal ceremony in line with the recently agreed pact.

                Overnight, the greenback soared to ceiling level of 109.68 yen JPY= against the Japanese currency, tallying a weekly high and just shy from 109.73 yen. In Asian board, the pair was quoted at 109.47 yen.

                “Although the overnight gains in the dollar were partly erased by dipping Treasury yields after the seven-year note auction, U.S.-China trade optimism has put a solid floor under the dollar,” said Toshinobu Chiba, chief portfolio manager of Nissay Asset Management.

“In any case, I don’t expect any large moves either way in markets today as trading remains subdued due to the holiday week,” he added.

US Treasury declined on Thursday following Treasury Department’s decision of selling $32 billion in seven-year notes to strong demand. The 10-year US10YR=RR hit 1.894%. its lowest ground in one and a half weeks.

Trade-sensitive Australian dollar AUD =D3 hiked up to $0.6951 against its US peer.

                The euro jumped at $1.1117 EUE= against US dollar.

                Yuan marginally lower and was quoted 6.9958 yuan per dollar CNH=

                Profits of Chinese industrial firms grew at its most rapid pace last November completely recuperating from three-consecutive setbacks. Such activity was mainly from strong performance in sales and production but frail records in domestic demands remain to be a pressing risk for 2020 earnings.