A cautious risk-on market mood was seen in quiet trade in the Asian session.
Regional equities rose 0.4%and the risk sensitive Australian and New Zealand Dollars edged higher whilst the safe havens US Dollar and Japanese Yen moved marginally lower.
November’s Japanese PMI surveys revealed that the manufacturing- and service-sector activity contracted for a 10th straight month. The rate of contraction picked up from October marking the first deterioration in conditions since April.
There is little on the economic calendar meaning risk sentiment is likely to be in focus. A risk off mood could prevail as markets digest an emerging spat between the US Treasury Department and the Federal Reserve.
US Treasury Secretary Mnuchin set to reclaim unspent funds from the Fed’s emergency lending program which was set up in the early stages of the Covid-19 outbreak. Mnuchin wants to use the money for fiscal stimulus while Congressional talks on additional aid are deadlocked.
The Fed, is so far standing its ground. The conflict between the two sides at a time when covid cases are rising and lockdown restrictions tightening could unnerve investors boosting both the yen and the USD..