04/ 05/ 2020

Week Ahead | US Dollar and Yen aim higher as stocks drop, Trump talks tariff

EUR/USD broke higher last week after the European Central Bank left interest rates unchanged, as expected, but continued to tweak its monetary measures to offset the economic damage to the Eurozone caused by the coronavirus pandemic.
Despite some terrible GDP data for the first quarter, and the likelihood that the second quarter will be even worse, sentiment towards the Euro improved and could well rally further.

Sterling found some support after some optimistic comments by the UK Prime Minister Boris Johnson's comments, saying that we have already past the peak and are on the downward slope of the virus outbreak.
 
Meanwhile, the pair moved little following the release of the final UK Manufacturing PMI, which was revised down to 32.6 for April from 32.8 and illustrated the severity of the economic damage caused by the pandemic.

30/ 04/ 2020

Experimental Antiviral Drug added optimism that Businesses across the Globe are closer to reopening Risk Sentiment Improved

The dollar fell on Wednesday after the Federal Reserve left interest rates unchanged and repeated a vow to do what it takes to shore up the economy that has been battered by business shutdowns due to the novel coronavirus. The dollar index against a basket of currencies fell 0.32% to 99.544, but held above a two-week low of 99.44 reached on Tuesday.

The greenback was also weighed down as signs the pandemic is receding in other countries and reduced safe-haven demand for holding funds in dollars. Positive trial results for a drug to treat COVID-19 also boosted the appetite for riskier assets.
After a two-day policy meeting ending Wednesday, the Fed kept interest rates near zero and promised to expand emergency programs as needed to help the battered economy. Data released on Wednesday showed U.S. gross domestic product contracted by 4.8% in the first quarter - the sharpest contraction since the Great Recession. Economists say the second quarter could be even worse.

The ECB, which announces its policy decision today, is under pressure to keep government bond yields from rising after rating agency Fitch cut Italy’s credit rating to one notch above junk due to the financial burden of the coronavirus outbreak. The ECB is already printing money at a record rate to buy up ballooning state debt. However, European Union officials have struggled to agree the details of a joint recovery fund, which shifts the burden to the ECB, analysts say.