FX Update: The dollar and yen came back under pressure

FX Update: The dollar and yen came back under pressure as risk-on positioning in global markets resumed. Most of the main dollar pairings and cross rates remained with recent ranges, though NZD-JPY saw a new one-year high, even as NZD-USD remained just off the 30-month high that was seen yesterday. Cable briefly traded above 1.3400 for the first time since early September before correcting. Europe's Stoxx 600 equity index gained nearly 1%, drawing back in on its nine-month high. The MSCI Asia-Pacific (ex-Japan) equity index rose over 1% after closing out November with a 9% on-the-month gain, which is the best monthly performance in 19 years. Japan's Nikkei posted a new 29-year high. U.S. equity index futures were showing gains of over 1%, as of the late London morning. Base metals gained, though remained off recent trend highs for the most part. The principal catalyst behind the prevailing risk-on theme was China's Caixin manufacturing PMI survey for November, which posted a seventh consecutive month of improvement in rising to 53.9, beating the consensus forecast and rising from 53.6 in the month prior -- and marking its best level in 10 years. In Europe, both the eurozone and UK final November manufacturing PMIs were unexpectedly revised up. Also in the mix was U.S. Treasury Secretary Mnuchin, who called on Congress to repurpose the near $0.5 tln in unused CARES funds. These factors came with Covid vaccine optimism running high, alongside massive liquidity from world central banks, prospects for more fiscal stimulus and a consumer spending spree, with household savings having been accumulating during the pandemic era. There are some reasons for caution, including a nearer-term one of investment funds having depleted cash, another being the risk that vaccination programs don't work as well as currently being envisaged, though the overall mix of factors is potently bullish for stock markets. In other developments, the RBA left its policy rate unchanged at 0.1%, as expected, and said in its statement that both fiscal and monetary stimulus would be needed "for some time." The OPEC+ group has deferred a decision on output quotas until Thursday.