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Asian Stocks Talking Points:

  • Most indexes edged up in a very cautious session
  • Hopes for a US China trade breakthrough kept optimism alive
  • However, the torturous Brexit saga kept buyers in check

Find out what retail foreign exchange investors make of your favorite currency’s chances right now at the DailyFX Sentiment Page

Most Asian stocks were cautiously higher on Friday, supported by the new trade hopes which lifted Wall Street overnight. Brexit worries kept a lid on investor exuberance, however. UK Prime Minister Theresa May’s deal has seen several high profile resignations from her Cabinet and extreme doubts that it can get through Parliament in any case.

A Financial Times report Thursday suggesting that China and the US were making huge effort to reach agreement on trade before this month’s Argentine meeting of the Group of 20 leading economies gave Friday’s session some support.

The Nikkei 225 was still the most obvious loser, but it was only down 0.1% as its close approached. The Shanghai Composite was up 0.6% while the Hang Seng was flat. The ASX 200 shed 0.1% with the Kospi up by a similar amount. The UK Pound was unsurprisingly pressured in the foreign exchange space by a Brexit drama, which looks as though it still has months to run. Both the US Dollar and the Japanese Yen benefitted from their perceived haven role, with the Australian Dollar modestly lower.

On its daily chart AUD/USD remains above the uptrend line which had previously contained much of this year’s trade, until it was broken to the upside at the start of this month.

Holding On Above Its Downtrend. Australian Dollar Vs US Dollar, Daily Chart.

Still, the currency completely lacks interest rate support, with the Official Cash Rate left on hold at its record 1.50% low for a 28th straight month in November. Without a sustainable rise in risk appetite it seems unlikely that its recent gains can hold.

Crude oil prices managed gains as the markets again looked to OPEC supply cuts, despite rising US supply.

Gold prices edged up, probably supported by Brexit-inspired jitters.

Still to come on Friday are official Consumer Price Index data out of the Eurozone for October. However those numbers are likely to take a back seat as far as investors are concerned to European Central Bank President Mario Draghi. He will speak in Frankfurt, as will German Bundesbank President Jens Weidmann.

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!