Daily Update - 18th March 2020
The dollar resumed its relentless climb against major currencies on Thursday as wild financial market volatility and worries over tightening The euro briefly rose against the dollar and the pound after the European Central Bank announced a 750 billion euro (711.71 billion pounds) asset-purchase programme in response to the coronavirus outbreak, but even this effort was overwhelmed by a stampede into the dollar. It’s a quiet day ahead on the economic calendar, with no material stats due out of the Eurozone to provide direction. The lack of stats leaves the markets to respond further to the ECB’s latest move to restore calm. With the EU in shut down mode, however, the economic doom and gloom ahead doesn’t bode well. For the markets, the bigger question is how much firepower the ECB has left to react to any marked deterioration in economic conditions. According to the latest coronavirus numbers from the EU, Italy continues to see the death toll rise, with the shutdown coming too late for many. For the Pound, it’s another quiet day ahead on the economic calendar, with no material stats due out of the UK to provide the Pound with direction. We’ve seen the Pound take a beating as the markets respond to the government’s unwillingness to shut down. Baby steps are not deemed good enough and the markets are expecting Armageddon as British PM Johnson talks of a severe recession coming. While Johnson talked of the need for a wartime government on Wednesday, the real issue is likely to be the government’s handling of the virus. The decision to only isolate the more vulnerable to allow the virus to pass through the main population was not well-received. On the policy front, the government’s budget and the BoE’s monetary policy response have also been modest relative to elsewhere… Across the Pond, it’s a relatively busy day ahead on the U.S economic calendar. On the economic data front, key stats include March Philly FED Manufacturing numbers and the weekly jobless claims figures. Expect plenty of sensitivity to the numbers, with the weekly jobless claims figures likely to garner plenty of interest. The markets will be looking for any shift in labor market conditions. Any move in initial jobless claims towards 300k levels and expect risk aversion to hit the majors once more. As for the Dollar, the Dollar Spot Index hits 100 levels and sees further upside as the Greenback reclaims its safe haven crownYesterday’s Market
Yesterday’s Explained
Sterling teetered near the lowest since at least 1985 against the greenback. The Australian dollar skidded to a 17-year low, while the New Zealand dollar crashed to an 11-year low as investors dumped riskier assets.
Today’s Market
Today’s Focus
