The Dollar has remained firm amid nervous global markets, with demand for cash dollars remaining high while some traditional safe haven assets, such as gold and US Treasuries, have nonetheless remained under pressure as investors rebalance portfolios and build cash cushions to cover margin calls. US bonds have been falling despite the Fed buying up to $40 bln worth daily in its revamped QE program. Some market narratives are also pointing to concerns about the US fiscal position light of the US government’s announcement for a $1.2 tln stimulus package. Gold prices are down 1.5%, though remain off the three-and-a-half-month low seen on Monday. Stock markets turned lower during the Asian session and opened in Europe down some 3-4%.
In currencies, movements have been relatively contained so far today. The Yen has outperformed, though concurrent Dollar strength has seen USDJPY lift back above 107.00 from a 106.76 low. The commodity and most developing world currencies remained under pressure. AUDJPY declined by over 1%, and has breached the 11-year low seen yesterday, trading at S1 – 63.80. AUDUSD remained heavy, also breaching the 17-year low seen yesterday at 0.5960, it trades at 0.5936. NZDUSD printed a fresh 11-year low at 0.5911. USDCAD, amid its biggest monthly gain since January 2015, remained buoyant but still held below the four-year high seen yesterday at 1.4276.
USOil prices hit a new major-trend low at $25.50, which is the lowest nominal level traded since May 2003. EURUSD ebbed back under 1.1000, but has so far remained shy of the three-week low seen yesterday at 1.0956. Regarding the coronavirus, there are concerns that the massive global fiscal and monetary stimulus measures, even when targeted well, will simply not be able to fully mitigate the impact of draconian lockdowns in an increasing number of economies.
Click here to access the HotForex Economic Calendar
Stuart Cowell
Head Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
