FX Update: The dollar and yen have been trading firmly.
FX Update: The dollar and yen have been trading firmly against most other currencies in early-week trading, with the euro and Australian dollar have been underperformers as markets digest European election results and prospects for trade wars, with Trump having doubled down and ratcheted up his warring words on Twitter over the weekend. Stock markets declined in Asia, as did U.S. and European equity index futures. The Italian election has seen anti-establishment parties succeed, generating the possibility of a Eurosceptic coalition forming. In Germany, The results of the SPD postal ballot found members endorsing the party forming a new grand coalition, with Merkel remaining as Chancellor. USD-JPY posted a low of 105.42, though remained above Friday's 15-month nadir at 105.25. EUR-JPY was showing the biggest percentage decline out of the main currency pairings and cross rates, of 0.5%, heading into the London interbank open. The cross logged a near five-month low of 129.43. AUD-JPY was also a notable underperformer, with the antipodean currency faring poorly in the risk-off environment, despite above-forecast Australian GDP and building approvals data. EUR-USD ebbed back under 1.2300, extending the correction from the two-week high posted on Friday at 1.2365.