The Dollar has risen after declining over the last two days. This comes with global stock markets returning to a sputtering price action following a two-day bounce. News that new coronavirus cases in China have doubled over the last day, and that a city in the north of the country went lockdown, just a day after Wuhan, where the pandemic originated, ended its two-month lockdown, spooked investors. Wuhan will now be a major focus as a test case to see if there will be a second wave of infections.
The narrow trade-weighted USDIndex (DXY) lifted by 0.5% in pegging a high at 100.43, which is about a two-third recovery of Tuesday’s decline. EURUSD concurrently declined by almost 0.5% in making a low at 1.0829. The Dollar subsequently pared some of its gains, which floated EURUSD back above 1.0850. USDJPY has been directionally challenged, holding with 108.51 and 109.00. AUDUSD fell 0.6% in posting a low at 0.6116 before rebounding to near net unchanged levels above 0.6160. S&P Ratings shifted its rating for Australia to negative as a consequence of the impact of global virus-containing measures on the open Australian economy. USDCAD climbed about 0.5% in making a high at 1.4082, extending the rebound from yesterday’s 12-day low at 1.3943, before ebbing back to the lower 1.4000s.
Oil prices have gained over 3% after diving by nearly 10% yesterday amid estimates for a massive rise in US crude inventories in the latest reporting week. (EIA data due at 15:30 GMT expects a rise of close to 10 million barrels) Most of the major oil producing countries will be talking on Thursday about curtailing supply, although oil analysts have been arguing that it will be difficult to completely offset the extent of the recent unprecedented level of demand destruction.
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Stuart Cowell
Head Market Analyst
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