Narrow ranges have been prevailing in currency markets ahead of some big event risk items on today’s calendar.
Asian and European stock markets, and US index futures, have retained buoyancy amid hopes that the peak global coronavirus infection rate may be approaching, which could mark the end of “phase 1” of the pandemic, with “phase 2” being how to exit from lockdowns while there is, as yet, no vaccine or cure.
EURUSD has posted a 40-pip range so far, with a two-day low at 1.0840 marking the downside limit. USDJPY has been idling in a 26-pip range, with 109.06 marking the upside cap. Cable has settled in the mid-to-upper 1.2300s, below yesterday’s one-week high at 1.2421. UK Prime Minister Boris Johnson remains in intensive care for what is now a fourth day. Official updates, as of yesterday, reported that he was responding well to treatment, but after downplaying his condition ahead of him being admitted to hospital and then an ICU, there is a degree of uncertainty about the accuracy of this. AUDUSD has edged out a 24-day high at 0.6246, buoyed by the current optimism in stock and commodity markets. USDCAD has posted a range of 1.4000-14054, holding within yesterday’s range.
Ahead today, attention will be on:
- The recommencement of the EU finance ministers’ meeting, at 15:00 GMT after yesterday’s meeting failed to find an accord on a region-wide fiscal plan to offset the impact of virus-containment measures.
- The OPEC+ group of oil producing nations will also begin its teleconference meeting, from 14:00 GMT.Markets are looking for an agreement to slash crude output by 10 mln barrels a day. There is significant scepticism among oil analysts that even a cut of this magnitude would be sufficient to offset the level of recent demand destruction.
- In the US, the weekly jobless claims report will once again take top billing (it’s expected to once again paint a dismal picture), along with ongoing deliberations in the US Congress on fiscal relief measures.
- Finally, FED Chair Powell is scheduled on a conference call from the Brookings Institution in Washington DC.
Note that trading will thin into the long weekend and tomorrow’s Good Friday holiday.
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Stuart Cowell
Head Market Analyst
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