US Equity Markets Start the Week Cautiously

OFX Daily Market News

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USD – United States Dollar

The U.S. equity market has started the week cautiously. Today is the first Monday in 3 weeks that has not begun in a limit-down scenario with reaction to the Covid-19 crisis. Markets wavered between gains and losses overnight signally to market participants that we are in for another bumpy ride this week again. Negative sentiment was being priced in as news of President Trump revised his view and ideology of the U.S. economy opening back up by Easter. The President has updated his guidance on COVID-19 to extend social distancing until April 30th. Market participants are pricing in a severe economic recession that will be fought with unprecedented stimulus measures.

U.S. household sentiment hit decade lows in March as Covid-19 cases in the U.S.A. pick up, triggering business closures and concerns about the future of the economy. The rating for current conditions also hit the lowest level since 2008, and a measure of the economic outlook hit its lowest level in more than three years, the University of Michigan data showed last Friday. This is a huge contrast from just a month earlier in which the strong job market and cheap fuel costs contributed to the second-highest sentiment reading since 2004.
More than 3.3 million Americans filed a claim for unemployment benefits last week, a record high that offers the first nationwide picture of the damage to the U.S. economy from the coronavirus shutdown. It is by far the most considerable single-week rise in unemployment claims since the department began publishing records in 1967. The numbers are an early indicator of a drastic slowdown in the U.S. economy, which will no doubt see very dreary results in the next coming months.

Key Movers

The OECD has estimated that for each month of containment to slow the spread of coronavirus, there will be a loss of 2% in annual GDP growth for major economies. The lockdown will directly affect sectors amounting to up to one-third of GDP in the G20 economies. The tourism sector alone is facing an output decrease as high as 70% according to new estimates. Many marketplaces will unavoidably fall into recession as production in affected countries halts, hitting supply chains across the world, and causing steep drops in consumption and consumer confidence.
India’s central bank has cut its benchmark rate to its lowest level on record to combat the potential ruinous economic and humanitarian effects of a 21-day shutdown due to the Covid-19 outbreak. The RBI’s monetary policy committee cut the country’s repo rate by 75 basis points to 4.4%, the lowest since its introduction around two decades ago. They are also injecting $49bn worth of liquidity into the financial system to help banks and lenders support customer’s short-term loans.
Sterling has made a good comeback from its worst week since the Global Financial Crisis, to now having its best weekly performance in more than a decade. It was largely attributed to a broad decline in the U.S Dollar, but specific measures by Boris Johnson’s government to curb the spread of the coronavirus may have also helped GBP. Sterling was ripe for a rally given that cable sank to 1.1412 intraday low on March 20, its weakest since 1985.

Expected Ranges

EUR/USD: 1.1009 – 1.1144 ▼

GBP/USD: 1.2317 – 1.2467 ▼

USD/CAD: 1.3982 – 1.4183 ▲

AUD/USD: 0.6111 – 0.6184 ▲

NZD/USD: 0.5983 – 0.6063 ▼


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Aussie dollar breaks through 61 US cents

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar rose through 0.61 US cents through trade on Friday, buoyed by a continued run in improved risk sentiment. The Australian dollar closed the week higher against the greenback, up nearly 1.37% for the day reaching a high of 0.6199, its highest level in the last 10 days. The Aussie regaining nearly 300 bps from its weekly low to retake the 0.61 handle on the back of broad-based selling pressure surrounding the USD which seems to have provided a boost to the Australian currency. Last week we saw a sharp jump in US jobless insurance claims which has added potency to an already sizeable drop in the US dollar since the Federal Reserve introduced new measures that were essentially intended to curb its strength. Locally talk of a third stimulus package in Australia that will support businesses that lose all their customers and would otherwise shutdown during lockdown has helped keep the Aussie strong after a good week. In the continued fight against the Coronavirus (Covid19) on Sunday night Australian Prime Minister Scott Morrison told all Australian not to go out in public with more than one other person while all public spaces including parks, playgrounds, skateparks and outside gyms will be closed from midday tomorrow.

Looking ahead this week in Australia and all eyes will be on Wednesday’s Reserve Banks Monetary Policy Meeting Minutes and Building approvals. Followed by Friday’s release of both AIG Construction Index and Final Retail Sales for the month of February. On the data front in the US this week we will start on Monday with Pending Home Sales for the month of February. On Tuesday we will see the release of US Consumer Confidence. Finally on Friday all eyes will be on the US Unemployment Rate decision. From a technical perspective, the AUD/USD pair is currently trading at 0.6147. We continue to expect support to hold on moves approaching 0.6125 while now any upward push will likely meet resistance around 0.6200.

Key Movers

Last week the Greenback posted its biggest weekly decline against a basket of currencies as trillions of dollars’ worth of stimulus efforts by governments and central banks helped temper a rout in global markets driven by the coronavirus (Covid19) pandemic. The U.S. House of Representatives on Friday approved a $2.2 trillion aid package, the largest in American history, to help people and businesses cope with the economic downturn inflicted by the coronavirus (Covid19) outbreak. The United States now has 85,594 people counted as infected, up from 68,211 on Friday. Unemployment claims jumped to a record 3.3 million last week, from 281,000 the previous week and easily ahead of the previous record of 695,000 set in October 1982, only served to fuel market expectations that the Federal Reserve would pump more money into the economy. US Equities were also down 3.5% on Friday ending a three-day rebound for US equities, the first such streak of gains since mid-February.

Expected Ranges

AUD/USD: 0.5850 – 0.6250 ▲

AUD/EUR: 0.5330 – 0.5780 ▲

GBP/AUD: 1.9530 – 2.0450 ▲

AUD/NZD: 1.0050 – 1.0350 ▼

AUD/CAD: 0.8450 – 0.8650 ▲


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$2 Trillion Stimulus Bill to Pass Today

OFX Daily Market News

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USD – United States Dollar

The U.S. House of Representatives today is set to pass the $2 trillion stimulus package and get funds to newly unemployed individuals and corporations under financial stress due to COVID-19. The stimulus bill is aimed at supporting financial markets and the domestic economy. The stimulus bill will be sent to the White House later today for President Donald Trump’s signature. Equity markets in the U.S. have halted their three-day win streak today as the U.S. has quickly become the global leader of COVID-19 case. The U.S. now has more confirmed cases of coronavirus than any other country, with more than 85,500 positive tests.
According to the latest figures collated by Johns Hopkins University, the U.S. has overtaken China (81,782 cases) and Italy (80,589).
But with almost 1,300 COVID-19-related fatalities, the U.S. death toll lags behind China (3,291) and Italy (8,215). But as mentioned yesterday, cases are doubling roughly every two days in New York alone.

The U.S. dollar retreated for a third consecutive session yesterday as risk sentiment continued to improve, and markets look to correct as the USD overshoot. With liquidity pressures easing, investors are unwinding USD shorts forcing the greenback lower against most major counterparts. While markets are mainly ignoring dire macroeconomic indicators, yesterday’s U.S. jobless claims were keenly anticipated as a marker that could drive further stimulus measures. U.S. unemployment filings rose at an unprecedented pace with more than 3 million Americans registering for unemployment, prompting investors to begin pricing in need for additional fiscal support. With the U.S. now surpassing China with the most significant number of COVID-19 cases worldwide, there are fears the angst across the country and economy extend well into the second half of 2020.

Key Movers

The Bank of Canada cut its overnight lending rate by 0.50 percent to 0.25 percent today. The Central Bank stated the cut would support the Canadian financial system, and add a needed boost to the economy. The BOC also introduces a commercial paper purchasing program as well as buy a minimum of $5B in government securities per week. Governor Poloz said that the Bank is not contemplating negative rates but is ready to take further action if and when required. The loonie fell against all its G10 counterparts at the announcement. The Canadian dollar has been one of the worst-performing currencies this year. A collapse in oil prices is due to a downturn in global demand, an oil price war that does not generate any headlines due to COVID-19 being the world’s biggest concern. WTI Crude Oil trades at 21.76 per barrel this morning down another 3.58 percent. American oil production sites are shutting down, and industry participants are expecting the biggest idling of wells in 35 years. As the Canadian is mostly an export-oriented economy market participants, do expect the slump in loonie pricing to continue into the coming quarter.
The euro jumped over 1 percent, pushing through 1.10 while the dollar slipped back below 110 Japanese yen. The Great British pound continued its recovery rallying nearly 2.55 and back through 1.20, touching 1.2174 while the Canadian dollar pushed back through 0.70 U.S. cents.
While attentions remain squarely affixed to the unfolding coronavirus pandemic, there is scope for further U.S. softness as risk appetite improves. However, we expect the USD to continue mostly well bided as the pall of uncertainty cast by COVID-19 and month /quarter-end rebalancing drive demand for the world’s base currency.

Expected Ranges

EUR/USD: 1.0953 – 1.1086 ▼

GBP/USD: 1.2144 -1.2323 ▲

USD/CAD: 1.3989 – 1.4154 ▲

AUD/USD: 0.6022 – 0.6126 ▼

NZD/USD: 0.5909 – 0.6015 ▼


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Risk sentiment drives AUD back through 0.60 US cents

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar pushed back through 0.60 US cents through trade on Thursday, buoyed by a sustained run in improved risk sentiment. Fears that crippled financial markets through much of the month to date continued to ease, as investors confidence is bolstered by the stimulus backdrops rolled out by central banks and governments around the world. This uptick in risk demand has been key in fostering the AUD recovery to date as investors unwind USD shorts and we edge nearer fair value estimates. Touching intraday highs at 0.6081, the AUD is up over 2% and appears set to test moves above 0.61 should the current risk on move continue.

Attentions remain squarely affixed to the ongoing developments and spread of the coronavirus and as China’s recovery gathers pace there is renewed optimism we will push through the other end of this crisis. China’s recovery bodes well for the AUD as our largest trading partner is vital driving demand for Australian commodities and exports. With factories re-opening and production escalating the focus now shifts to re-building global demand. With Europe and the US mired in the height of the epidemic demand side softness continues to plague the global economy. Watch resistance on moves approaching 0.6090-0.61 with supports on moves approaching 0.5730.

Key Movers

The US dollar retreated for a third consecutive session as risk sentiment continues to improve and markets look to correct the USD overshoot. With liquidity pressures easing, investors are unwinding USD shorts forcing the greenback lower against most major counterparts. While markets are largely ignoring dire macroeconomic indicators, yesterday’s US jobless claims was keenly anticipated as a marker that could drive further stimulus measures. US unemployment filings rose at an unprecedented pace with more than 3 million Americans registering for unemployment, prompting investors to begin pricing in a need for additional fiscal support. With the US now surpassing China with the largest number of COVID-19 cases worldwide there are fears the angst across the country and economy extend well into the second half of 2020.

The euro jumped over 1%, pushing through 1.10 while the dollar slipped back below 110 Japanese yen. The Great British pound continued its recovery rallying nearly 2.55 and back through 1.20, touching 1.2174 while the Canadian dollar pushed back through 0.70US cents.
While attentions remain squarely affixed to the unfolding coronavirus pandemic there is scope for further US softness as risk appetite improves. However, we expect the USD to remain largely well bid as the pall of uncertainty cast by COVID-19 and month /quarter end rebalancing drive demand for the worlds base currency.

Expected Ranges

AUD/USD: 0.5730 – 0.6150 ▲

AUD/EUR: 0.5330 – 0.5580 ▲

GBP/AUD: 1.9530 – 2.0450 ▲

AUD/NZD: 1.0080 – 1.0220 ▼

AUD/CAD: 0.8310 – 0.8550 ▲


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Aussie break above 0.60 short lived as upside moves meet resistance

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar enjoyed mixed fortunes through trade on Wednesday, pushing back through 0.60 US cents before correcting lower into the daily close, opening this morning largely unchanged at 0.5960. Improvements in demand for risk continued through Wednesday as investors responded to the $2 trillion stimulus package approved by Congress. Specific details are yet to be released but treasury secretary Mnuchin and Republican leader Mitch McConnell have intimated the plan will reach those hardest hit by the crisis, prop up the labour market and cushion the blow of looming recession for all Americans. The AUD enjoyed a strong risk on drive in the wake of the announcement breaking resistance at 0.60 and extending to intraday highs at 0.6065 before correcting lower as profit taking, and the broader risk profile prompted a move back toward 0.5950.

With improvements in risk sentiment helping prop up the AUD, we expect supports above last weeks 0.5510 low to hold through the short term. Markets are beginning to respond to the record levels of stimulus passed through by governments around the globe, while the Fed’s unprecedented loosing of financial conditions have helped ease liquidity concerns. While there is scope for the AUD to recoup losses suffered through the middle of March, the looming and unrelenting coronavirus pandemic continues to cast a pall over markets, weighing on moves to the upside. We anticipate resistance on runs above 0.60/0.6050.

Key Movers

The US dollar index fell for a second consecutive session as risk sentiment improved following US lawmakers announcement of a $2 trillion dollar stimulus package. Equities and stocks surged while commodity led and emerging market currencies jumped higher as demand for safe haven assets eased and investor’s confidence grew in the wake of stimulus plan. While the specifics of the plan are yet to be released as the bill is set to be rushed through the House and Senate in the latter half of the week we expect it will target key industries devastated by the coronavirus, while propping up the labour market and cushioning the blow of the looming recession with cheques for most Americans. The dollar index fell 0.81% to 101.87, led by gains in key counterparts. Sterling’s upturn continued pushing through 1.19 while the Euro advanced 1%, testing 1.09. The single currency found added support following Germany’s decision to remove its debt break, freeing Chancellor Merkel to deliver record stimulus. Germany’s economy was already faltering prior to the crisis and estimates suggest 20% could be wiped off Europe’s engine room in the wake of the coronavirus. As confidence across Europe tumbles, stimulus measures are a welcome reprieve and may lend the Euro some short term support.

Attentions remain squarely affixed to the evolving coronavirus pandemic and while we have seen a correction in USD through the last two days, we expect the worlds base currency will remain will bid in the face of ongoing uncertainty.

Expected Ranges

AUD/USD: 0.5510 – 0.6050 ▲

AUD/EUR: 0.5350 – 0.5610 ▼

GBP/AUD: 1.9550 – 2.0520 ▲

AUD/NZD: 1.0030 – 1.0220 ▼

AUD/CAD: 0.8350 – 0.8680 ▼


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The Dow’s Biggest One Day Surge Since 1933 Overshadowed by COVID-19

OFX Daily Market News

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USD – United States Dollar

New York continues the bear the brunt of infections in the States, with cases doubling every three days. Despite this grave situation, Donald Trump yesterday said he wants America back to work by Easter, less than three weeks from now. Many see this target as optimistic at best as cases continue to skyrocket however the Dow Jones saw its biggest one day surge since 1933 rising 11.4% reclaiming the 21k handle. The approval of a US stimulus package and the Federal Reserves unlimited QE programme appear to have calmed markets around the world along with the number of new cases in China looking to have ceased.
The US dollar fell against the majority of significant counterparty through trade on Tuesday as investors responded to the unprecedented stimulus measures enacted by the Federal Reserve on Monday. Emboldened markets drove equities higher and began unwinding last week’s panic led liquidity push forcing the world’s base currency index lower for the first time in the previous 11 days. With the pace of spread across Europe slowing this week, the US, in particular, New York City, has emerged as the new epicentre in the ongoing battle against COVID19. The US has been criticized as being to slow to react to the threat of the coronavirus and modelling suggest the health impact within the States could outstrip hotspots in Italy, Spain and even China.

Key Movers

The Great British Pound was the days’ big mover, bouncing back against the USD and testing moves through 1.18. Having touched a 35 year low last week, sterling found support in a renewed demand for risk and a broader softening in the USD. The GBP remains vulnerable to broader risk sentiment swings with is ballooning current account deficit making it particularly vulnerable to risk-off moves.
Attentions remains squarely affixed to the COVID19 pandemic. While we anticipate most currency will recoup much of the losses suffered against the USD in time, the world’s base currency will continue to find support as long as the pandemic continues. The pace of spread across the globe remains mostly unchecked.

Expected Ranges

EUR/USD: 1.0760 – 1.0849 ▲

GBP/USD: 1.1711 – 1.1973 ▼

USD/CAD: 1.4296 – 1.4461 ▼

AUD/USD: 0.5935 – 0.6073 ▼

NZD/USD: 0.5793 – 0.5912 ▼


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AUD tests 0.60 as risk sentiment improves

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar creeped higher through trade on Tuesday, pushing through 0.59 to touch 0.5975 as improvements in demand for risk prompted gains against the USD and key haven crosses. Equities led the recovery Tuesday bouncing almost 8%, emboldened by unprecedented monetary policy measures enacted by the Federal Reserve and the ongoing promise of fiscal stimulus. A semblance of calm (when compared with the activities of the last fortnight) appears to enveloped markets as investors take confidence in the measures implemented to cushion the health and economic impact of the coronavirus by governments and central banks around the world. Encouragingly the drastic lockdown measures across Europe appear to be working as the pace of spread slowed through Monday and Tuesday and attentions now turn to the US as the next epicenter of the crisis. The WHO has criticized US officials for being to slow in enacting containment measures as the virus spreads through New York City at an alarmingly rapid pace with more cases per million citizens than Hubei Province.

Risk sentiment continues to drive direction and as more and more countries employ the measures necessary to contain the virus there is ample scope for another risk off move as the growth outlook across the domestic and global economy is constrained. While we see room for short-term AUD upside as investors unwind the US liquidity push and recent overshoot, we remain conscious the dollar is vulnerable to the heightened volatility and swings in sentiment. Watch resistance on moves approaching 0.60 with supports at last weeks low of 0.5510 intact for now.

Key Movers

The US dollar fell against the majority of major counterparty through trade on Tuesday as investors responded to the unprecedented stimulus measures enacted by the Federal reserve on Monday. Emboldened markets drove equities higher and began unwinding last week’s panic led liquidity push forcing the worlds base currency index lower for the first time in the last 11 days. With the pace of spread across Europe slowing this week the US, in particular New York city, has emerged as the new epicentre in the ongoing battle against COVID19. The US has been criticized as being to slow to react to the threat of the coronavirus and modelling suggest the health impact within the States could outstrip hotspots in Italy, Spain and even China.

The Great British Pound was the days big mover, bouncing back against the USD and testing moves through 1.18. Having touched 35 year lows last week, sterling found support in renewed demand for risk and a broader softening in the USD. The GBP remains vulnerable to broader risk sentiment swings with is ballooning current account deficit making it particularly vulnerable to risk off moves.

Attentions remains squarely affixed to the COVID19 pandemic and while we anticipate most currency will recoup much of the losses suffered against the USD in time, the world’s base currency will continue to find support as long as the pandemic continues and the pace of spread across the globe remains largely unchecked.

Expected Ranges

AUD/USD: 0.5510 0.6080 ▲

AUD/EUR: 0.5070 – 0.5620 ▲

GBP/AUD: 1.9520 – 2.0180 ▲

AUD/NZD: 1.0080 – 1.0280 ▼

AUD/CAD: 0.8240 – 0.8720 ▲


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Federal Reserve Employs Unprecedented Measures

OFX Daily Market News

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USD – United States Dollar

The US dollar fell through trade on Monday after the Fed announced unprecedented monetary policy stimulus measures designed to sure up the domestic economy and cushion the impact of the looming recession. The Federal Reserve announced new programs wherein it will lend against student loans, credit cards and small businesses while supporting larger employers in maintaining as much of the domestic workforce as possible. The Fed will also expand its purchase of mortgage-backed securities to help normalize market function, doing everything it can to help guide the economy through this unmatched period of uncertainty.
While broader markets remain reluctant to buy back into risk assets, we expect haven plays will remain popular through the short and medium-term. That said, we would expect the record levels of the central bank and government stimulus to bite at some point. As Congress tries to pass a 2 trillion dollar stimulus package, we anticipate confidence among investors will improve, perhaps weighing on the USD and fostering a correction of the recent overshoot.

Key Movers

Europe continues to be the focal point of the Coronavirus outbreak, with Italy having recorded 6077 deaths from Covid-19 with cases predominantly located in the northern province of Lombardy. Some solace can be taken that the rate of fatalities has fallen for two straight days with Monday’s figure reported the number of 602 down from Saturdays 793. The latest update today will be closely followed, and hopefully, we will see a further decline.
Spain continues to suffer, in particular, Madrid, with 462 deaths reported across the country yesterday, taking the total to 2182. There are now around 380k cases confirmed globally, with nearly 17k deaths as a result of the outbreak.
America has seen cases soar over the past few days, with many states now in lockdown as the virus spreads across the country. New York State is severely affected, with around half of the countries 31k cases centred there. Despite the Senate being unable to agree on a government rescue package for the nation, the US Federal Reserve has intervened, offering unlimited funds as a backstop to the economy as well as starting an unlimited QE programme. The European Central Bank is set to unveil further assistance this week to limit what is likely to be a short but profound recession, potentially dwarfing that seen in 2008.
Markets seem to be in the (relatively) upbeat mood this morning however, as all major stock markets post significant gains and riskier currencies surge with both the Aussie and Kiwi posting >2% rise against USD.
EUR/USD trades at 1.0860 with USD/JPY at 110.30

Expected Ranges

EUR/USD: 1.0752 – 1.0888 ▲

GBP/USD: 1.1578 – 1.1799 ▲

USD/CAD: 1.4375 – 1.4532 ▲

AUD/USD: 0.5864 – 0.5975 ▲

NZD/USD: 0.5734 – 0.5839 ▲


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Aussie ticks higher as Fed employs unprecedented measures

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar struggled to find momentum through trade on Monday, bouncing between 0.5704 and 0.5820 as markets continue to grapple with the spreading coronavirus pandemic. The AUD maintained a relatively tight range when compared with recent volatility and moves across equity markets as central bank efforts to alleviate concerns surrounding the glut of bonds flooding the market have helped offset wider price swings. It is becoming increasingly difficult for investors to ignore the unrelenting advance of the COVID-19 virus and the corresponding economic impact. Despite record levels of fiscal stimulus, markets are reluctant to buy back into risk assets in the face of ongoing uncertainty, weighing on the Australian dollar and suppressing short-term upside.

The AUD did find some support in the face of a broader USD sell off as the Fed announced new measures to backstop the economic slowdown. Opening this morning at 0.5808 US cents, attentions remain squarely affixed on the unfolding pandemic. Watch supports at last weeks lows at 0.5510 with resistance on moves approaching 0.5950/0.60.

Key Movers

The US dollar fell through trade on Monday after the Fed announced unprecedented monetary policy stimulus measures designed to sure up the domestic economy and cushion the impact of the looming recession. The Federal reserve announced new programs wherein it will lend against student loans, credit cards and small businesses, while supporting larger employers in maintaining as much of the domestic workforce as possible. The Fed will also expand its purchase of mortgage backed securities to help normalise market function, doing everything it can to help guide the economy through this unmatched period of uncertainty.

While broader markets remain reluctant to buy back into risk assets we expect haven plays will remain popular through the short and medium term. That said we would expect the record levels of central bank and government stimulus to bite at some point. As congress passes a 2 trillion dollar stimulus package we anticipate confidence among investors will improve, perhaps weighing on the USD and fostering a correction of the recent overshoot.

Sterling’s meteoric collapse continued through trade on Monday as investors dropped the currency amid coronavirus concerns. The Pound slipped back below 1.15 and edged nearer last week’s low of 1.1413. Investors are reluctant to hold onto the GBP as current account concerns and fears Britain’s approach to dealing with the coronavirus outbreak will mean a prolonged and disjointed disruption to economic performance. With recent moves primarily across short positions there is still scope for a deeper depreciation as normal market function resumes and investors begin assessing net long balances. Watch support at 35 year lows with a break potentially signaling another run on pound.

Expected Ranges

AUD/USD: 0.5510 – 0.5980 ▲

AUD/EUR: 0.5280 – 0.5510 ▲

GBP/AUD: 1.9480 – 2.0320 ▼

AUD/NZD: 1.0080 – 1.0240 ▼

AUD/CAD: 0.8080 – 0.8510 ▼
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Jobless Claims Rise As U.S. Cities and States Combat Covid-19

OFX Daily Market News

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USD – United States Dollar

North American equities posted their worst week since the global financial crisis with the S&P 500 falling to its lowest level in three years, ending the week 15 percent down. WTI is down 31.32 percent on the month, U.S. crude oil futures were down another 1.5 percent at $22.35 a barrel. This comes on the back of a flurry of emergency packages from G-7 central banks intended to buffer economies and financial markets against the global economic shutdown triggered by the coronavirus pandemic.
The U.S. faces a wave of jobless claims as states from Ohio to Pennsylvania saw a surge in the number of people who have been laid off in recent days, overwhelming state labor agencies as cities shut down to halt the spread of the coronavirus. A report last Thursday showed a steep rise in claims for unemployment insurance; 281k, up from 211k the previous week. The initial report means that the U.S.’s unemployment data due out early next month could weigh heavily on the economy and the USD.

Key Movers

Asian stocks Monday tumble and US S&P futures dropping 5 percent in the open, hitting another “limit down” amid a pick up on deaths from the virus and a lack of agreement by the U.S. Government on an Aid plan. The USD lost some ground against the JPY, EUR and GBP but is still trading very strong against emerging market currencies. NZD announced they’d start buying bonds to stimulate the economy, and the Indian rupee reached a new low against the USD after the country also announced a lockdown.
The traditional safe-haven Gold is losing out to the U.S. dollar as investors look for shelter from the virus-driven storm that has wreaked havoc over risk assets. With the USD soaring last week, Gold headed for its lowest close in three months. Some reasoning behind the fall is that investors are cashing-in from long positions built before the recent spike to be able to pay margin calls or losses in other assets.

Expected Ranges

EUR/USD: 1.0636 – 1.0806 ▲

GBP/USD: 1.1506 – 1.1731 ▲

USD/CAD: 1.4335 – 1.4491 ▲

AUD/USD: 0.5699 – 0.5842 ▲

NZD/USD: 0.5585 – 0.5738 ▲


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