The USDIndex edged out a fresh 27-month low at 92.50, continuing what is a fourth consecutive week of decline and a fourth straight month of decline, dropping by just over 10% from the early March peak. The loss of confidence in the US currency has partly been reflected in the ongoing rally in gold, which has remained buoyant after posting a fresh record nominal high at $2,055.00 yesterday.
A deal on the US fiscal package remains elusive, though President Trump’s threat to take executive action to cut payroll taxes managed to keep investor spirits up, along with the above-forecast services ISM out of the US, and more positive news from the candidate vaccine front for the SARS Cov-2 coronavirus. The good vibe across equity markets flagged somewhat as the Asia session wore on, however. The MSCI Asia-Pacific equity index printed a six-and-a-half-month-high during early trading before turning lower to near net unchanged levels. S&P 500 futures, while off highs, still show moderate gains, while the European markets have opened lower to start the day.
AUDUSD saw a downward flurry after the Australian government lifted its unemployment forecast while forecasting growth would be trimmed by 2.5 percentage points as a consequence of its own lockdown measures (having chosen the sledgehammer approach, similar to many other nations, despite the standout success of the much less costly Swedish approach, which has refrained from lockdown and masks and has performed near the same as most other European countries during the pandemic, with its ICU and mortality numbers having now dropped to near nothing). AUDUSD dipped to a 0.7184 low, which is nearly 60 pips below yesterday’s peak.
Elsewhere, EURUSD edged out a new 27-month high at 1.1917, and Cable a five-month peak at 1.3182. USDJPY idled in the mid 105.00s, above yesterday’s six-day low at 105.32. USDCAD settled above the six-month low seen yesterday at 1.3231. Front-month USOIL crude futures settled in the lower $42.00s, below Wednesday’s five-month peak at $43.52.
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Stuart Cowell
Head Market Analyst
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