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· Signs that the U.S. and China were making progress in efforts to resolve their trade dispute supported both the dollar and trade-exposed Asian currencies on Tuesday, while the Canadian dollar rose as voters went to the polls in a closely-fought election.

The volatile pound sat just under a 5-1/2-month high at $1.2962, with the Brexit project in disarray but traders looking to another crucial parliamentary vote on Tuesday to determine the next step.

U.S. President Donald Trump said in Washington that work toward ending the U.S.-China dispute was going well, while White House adviser Larry Kudlow said tariffs scheduled for December could be withdrawn if progress is made.

Meanwhile Commerce Secretary Wilbur Ross said that while a deal may not be finalized next month, that was less important than securing “the right deal,” following Chinese Vice Premier and chief negotiator Liu He saying last week that Beijing is approaching talks from a basis of mutual respect.

· The dollar was steady against most major currencies in early Asian trade, holding only a fraction below a three-month high against the Japanese yen at 108.58 yen per dollar.

It lifted from a two-month low touched against the euro overnight to steady at $1.1148, and was flat against a basket of currencies at 97.304.

The Canadian dollar - the best performing G10 currency this year - climbed to a three-month high of 1.3082 per dollar overnight as voters turned out in an election expected to be too close to call.

It held near that level as the first polls closed, with Prime Minister Justin Trudeau seeking to cling to power against a strong challenge from opposition Conservatives.

· The pound held steady at $1.2969, with Brexit developments set to determine its fate.

With just over a week before Britain is due to leave the European Union, Boris Johnson’s push to re-run a parliamentary vote he lost on the weekend was rejected.

But he has resolved to press on with seeking to pass Brexit-related laws in parliament on Tuesday, with their progress to determine the timeline.

· Canadian Prime Minister Justin Trudeau held on to his job in Monday’s election, securing his spot as one of the world’s few high-profile progressive leaders, but tarnished by scandal and with his power diminished.

· China will closely monitor the U.S. “entity list”, which has led to sanctions on a few Chinese tech firms, and take measures to safeguard its rights and interests, the Ministry of Industry and Information Technology (MIIT) said.

Firms on the U.S. “entity list” are barred from buying U.S. parts and components without U.S. government approval.

· Boris Johnson will make a final bid on Tuesday to force Brexit through by the 31 October “do or die” deadline, amid growing signs he will make a renewed push for a general election whether his deal passes or not.

Johnson has already requested a delay to Brexit, by sending the letter to Brussels required by the backbench Benn act after MPs declined to support his deal on Saturday – something he said he would rather be “dead in a ditch” than do.

But if the government can force its Brexit bill through parliament in time, the UK could in theory still leave the EU by next Thursday’s deadline.

Prime Minister Boris Johnson faces a potentially perilous ratification of his Brexit divorce deal in the British parliament after the speaker refused to allow a vote on it on Monday.

· China and the United States have achieved some progress in their trade talks, Vice Foreign Minister Le Yucheng said on Tuesday, and any problem could be resolved as long as both sides respected each other.

No country can prosper without working with other nations, Le said at the Xiangshan Forum in Beijing, which China styles as its answer to the annual Shangri-La Dialogue security forum in Singapore.

· The yuan will continue trading above 7-per-dollar even if the United States and China manage to ink a partial deal, experts say.

“The yuan will be stuck in a narrow range until we know for certain that Phase 1 of the trade deal is signed,” Stuart Oakley, global head of flow foreign exchange at Nomura, told CNBC by email.

“I’d estimate that range to be 0.50% either side of 7.0750 up until 16th Nov — with a slight bias to the downside,” he said, referring to next month’s Asia-Pacific Economic Cooperation meeting which will be attended by U.S. President Donald Trump and Chinese President Xi Jinping. The currency pair will likely head toward 7.00 if the two sides are able to sign an agreement in Chile, he added.

· Cheong Wa Dae didn't rule out the possibility of President Moon Jae-in holding a summit with Japanese Prime Minister Shinzo Abe on the sidelines of their participation at next month's Asia-Pacific Economic Cooperation (APEC) gathering in Chile.

"President Moon plans to forgo meeting with Abe at other chances including an ASEAN meeting in October and an APEC meeting in Chile in November. If the Seoul-Tokyo summit happens, APEC could be the right venue for the bilateral summit as U.S. President Donald Trump is considering attending the gathering," a presidential aide said, Monday.

"But the summit won't take place unless Tokyo takes some visible and even constructive measures on the issue of Korean victims of forced labor during the Japanese occupation of Korea and steps to withdraw its earlier decision to impose export controls on materials."

· Futures traders now see a rate cut as the near-certain outcome of next week’s Federal Reserve meeting as a stagnant manufacturing sector weighs on the economy.

CME’s FedWatch tool on Monday showed a 91% chance of a 25 basis point cut at the October 29 and 30 meeting of the Federal Open Market Committee. Comments from Fed policymakers prior to entering the traditional pre-meeting quiet period indicated a bias toward a third consecutive cut.

· “The U.S. economy confronts some evident risks in this the 11th year of economic expansion,” Fed Vice Chairman Richard Clarida said in a speech on Friday. “Business fixed investment has slowed notably since last year, exports are contracting on a year-over-year basis, and indicators of manufacturing activity are weakening

· Mario Draghi’s last meeting as ECB chief on Thursday may prove a lively gathering given a deep rift among policymakers over renewed asset purchases. After unleashing a wave of stimulus measures in September — including an interest-rate cut and a decision to restart asset purchases to boost the eurozone economy — no major announcements are anticipated.

Some expected Thursday’s meeting to be a largely ceremonial one to mark the end of Mr Draghi’s eight-year term, which concludes on October 31. But the ECB is also likely to be asked about the impact of its last policy measures given low inflation expectations and concern that the central bank is running out of firepower.

· Oil prices were little changed Tuesday as lingering worries over a global economic slowdown that could hurt oil demand offset some signs of progress in U.S.-China trade talks.

Brent crude oil futures were down 6 cents, or 0.1% to $58.90 a barrel by 0309 GMT, while U.S. West Texas Intermediate (WTI) crude futures were flat at $53.31 per barre

U.S. President Donald Trump on Monday said efforts to end a U.S. trade war with China were going well as negotiators from the two nations work to nail down a Phase 1 trade deal text for their leaders to sign next month when they meet at November’s APEC summit.