US-China Trade Talks Begin in South Korea Ahead of Trump-Xi Beijing Summit 
Asian Currencies Steady as Trump-Xi Summit, Inflation Concerns Boost Dollar 
RBA Raises Interest Rates to 4.35% Amid Rising Inflation Risks and Middle East Tensions 
Bank of England Set to Hold Interest Rates as Inflation Risks and Iran War Impact Loom 
Oil Prices Slip as Strait of Hormuz Disruptions and U.S. Inventory Data Keep Markets on Edge 
Australia Housing Tax Reform Sparks Debate Over Property Investor Tax Breaks 
Dollar Gains as Fed Rate Hike Bets Rise Ahead of Trump-Xi Summit 
ECB Signals Possible Interest Rate Move if Inflation Outlook Fails to Improve 
BOJ Governor Kazuo Ueda Hints at Rate Hike as Inflation Pressures Build 
BOJ Holds Interest Rates at 0.75% as Policymakers Signal Growing Inflation Concerns 
S&P Global Revises Mexico Credit Outlook to Negative Amid Rising Debt Concerns 
The ECB’s softer tone amid downside risks to the Eurozone growth could suppress the EUR’s strength for now. ECB President Mario Draghi said in an opening statement at his news conference last Thursday that "the risks surrounding the euro area growth outlook have moved to the downside."
Meanwhile, portfolio inflows and local authorities’ measures are supportive of the high-yielding IDR, while rising expectations of the Fed to ease rate hikes and end the balance sheet reduction earlier than expected will spur risk appetite. BI Governor Perry Warjiyo told reporters in Jakarta on Friday that the central bank will soon issue a rule on special account for export earnings.
The rule is expected to encourage exporters to keep forex earnings onshore and to ease tax incentive mechanism. The BI also hopes government efforts to boost exports and foreign tourist arrivals could help improve the nation’s current account deficit. In addition, the Indonesian government plans to conduct private placement more selectively in a bid to retain onshore more than USD10 billion that was repatriated under a tax amnesty program three years ago, the report added.
The WSJ reported Friday that "Federal Reserve officials are close to deciding they will maintain a larger portfolio of Treasury securities than they’d expected when they began shrinking those holdings two years ago, putting an end to the central bank’s portfolio wind-down closer into sight."
The move would spur risk appetite across the markets, according to the report. Last but not least, US Treasury Secretary Steven Mnuchin said on Thursday that he thought the US and China were "making a lot of progress" in trade talks, with currency issues also on the agenda.
According to Bloomberg, PBoC Governor Yi Gang will join high-level trade talks led by Vice Premier Liu He. It has raised market expectations of the yuan appreciation last Friday, boosting other regional currencies as well, Scotiabank further noted.
