11/ 03/ 2020

It’s a Busy Day Ahead for the Pound, with Economic Data and the Budget in Focus

The dollar had jumped back on Tuesday as investors hoped global monetary policymakers will launch further stimulus plans aimed at bolstering economies hit by trade and travel disruptions. U.S. President Donald Trump said that he will ask Congress for a payroll tax cut and other “very major” stimulus moves, although the details remain unclear. “It is too early to say the market sentiment has turned positive. Yesterday’s rebound in the dollar and in risk assets is a type of a rebound you often see in a downtrend,” says Currency Analyst. The pound slumped against the dollar on the eve of the U.K. budget revelation despite expectations the country is set to deliver a big stimulus package and measures to help combat the Covid‐19 outbreak. GBP/USD fell 1.59% to $1.29.

On the EUR-side of the story, the risks of a recession in the Eurozone, particularly in Germany, remain high in the face of the infectious disease. Therefore, the European Central Bank (ECB) will likely resort to additional stimulus measures on Thursday to cushion the economic blow, which could very well hurt the shared currency, with the EUR/USD correction likely to resume.

It’s a busy day ahead for the Pound. Today’s stats and the government’s budget will likely influence the BoE’s next policy decision.

10/ 03/ 2020

U.S. President Announces Possible Fiscal Stimulus; Dollar recovers slightly on hopes for stimulus following oil and virus shock

It was a meltdown across the global financial markets on Monday, with riskier assets taking a hammering. Oil prices tumbled by more than 30% at the open, as the markets responded to OPEC and Russia’s failure to strike a deal. Negative sentiment towards supply and demand led to oil prices and the European equity markets tumbling into bearish territory. The Saudis reportedly cut oil prices to stoke demand, suggesting an imminent ramp-up in production in what could become a lengthy price war with Russia. The ongoing spread of the coronavirus across Europe and the U.S did the damage. The markets have already seen the initial damage to the Chinese economy.

Unsurprisingly, economic data continued to take a backseat, with the EU and U.S economies anticipated to be next in line to suffer the consequences of not taking containment measures early on.

Looking ahead, it’s a positive start to the day for the Greenback as the markets look to shake off Monday’s meltdown. Coronavirus news updates will remain a key driver, however.

09/ 03/ 2020

Week Ahead | Economic uncertainty continues with the Virus, Stats and the ECB in Focus

The U.S. dollar fell across the board on Friday, posting its biggest weekly loss in four years, as a sharp drop in U.S. government bond yields hurt the greenback’s appeal. Investors have slashed expectations for U.S. interest rates after an emergency Fed rate cut of 50 basis points earlier this week to counter the economic fallout from the spreading coronavirus.

The euro was about 0.7% higher at an eight-month high of 1.1311. Against the Japanese yen, the dollar was down 0.6% at 105.49 yen, a more than six-month low.Currency volatility gauges rose on Friday, with one-month euro-dollar implied volatility reaching its highest since November 2018.

With the markets still buzzing over the deep rate cut by the Federal Reserve, investors will be keeping an eye on the ECB policy meeting this week. We’ll also get a look at eurozone GDP and German inflation. The UK will release monthly GDP and the annual budget, while the U.S. publishes consumer inflation reports.

05/ 03/ 2020

Sentiment towards Fiscal and Monetary Policy to Remain in the Spotlight

The dollar recovered lost ground against a basket of currencies on Wednesday, a day after an emergency interest rate cut by the Federal Reserve knocked the U.S. currency to an eight-week low. The U.S. central bank surprised investors by slashing rates by 50 basis points to a target range of 1.00% to 1.25%, two weeks ahead of a regularly scheduled policy meeting, in an effort to combat the economic impact of the coronavirus. “With the ECB about to cut imminently, it has deflated the euro balloon a bit,” stated by a chief market strategist referring to the European Central Bank. Money markets in the euro zone are pricing a 90% chance that the ECB will cut its deposit rate, now minus 0.50%, by 10 basis points next week.

Sterling rose 0.44% against the dollar, as incoming Bank of England Governor Andrew Bailey hurt expectations for a BoE rate cut by saying that any measures to counter the economic hit from the coronavirus outbreak would be best done in tandem with Britain’s government. Along with California State has called on State of Emergency with New 11 cases found.

It’s a quiet day on the economic calendar, which leaves central banks and governments and the battle against the coronavirus in focus.