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The market mood remained cautious, with the worries over the coronavirus spread returned after the hotspots on both sides of the Atlantic reported a rise in the new cases. As a tepid sentiment seeped in, the US dollar extended the overnight bounce against its six majors peers, despite the gains in the Asian equities and US stock futures.

New York reported 731 deaths from the respiratory illness, the sharpest single-day spike while the German and Spanish daily toll jumped. The Australian credit outlook downgraded from stable to negative by S&P Global also dampened the investors’ sentiment. Although some relief was seen after Wuhan, China’s epicenter, reported zero virus cases, especially after the lockdown measures were lifted.

Within the G10 currency markets, USD/JPY consolidates the downside moves below 109.00, as the yen drew bids from on the economic impact of Japan’s state of emergency. The Aussie was sold-off into the outlook downgrade but kept its range play intact below 0.6150. NZD/USD also weakened and traded around 0.5950 despite the RBNZ’s support measures. The Canadian dollar failed to benefit from the oil prices rebound and traded with sizeable losses against its US peer. Oil prices staged a solid comeback on increased odds of output cuts by the OPEC+ on Thursday.

Among the European currencies, EUR/USD dropped back below 1.0900 as the US dollar was bid on haven demand while the cable headed south towards 1.2300. Meanwhile, Gold prices regained the 1650 mark.

Main topics in Asia

US Pres. Trump: See glimmers of hope despite very painful week

UK: Help us find new antibody test for coronavirus, ministers tell industry – The Times

Australia outlook to negative from stable by S&P

RBNZ: Open to increasing the size of QE

US VP Pence: CDC will have new guidance on how someone may be able to return to work

China’s Hubei province reports zero new cases on April 7 vs zero on April 6

US President Trump: starting to look at reopening economy very thoroughly – FOX

BOJ: Will take necessary steps to ensure economic stability.

NZ PM Ardern: Businesses will face a new normal at lower levels

Japan GDP to contract by 25% in Q2, worst on record – Goldman Sachs

S. Korean Pres. Moon: Considering extra measures worth 17.7trln won to support domestic demand

Silver Price Analysis: Rejected at 4H 200MA, down 1%

Key focus ahead        

Wednesday’s EUR macro calendar is a thin showing, with nothing of relevance and therefore, the coronavirus statistics from across Europe and the UK will drive the market sentiment.

The NA calendar also lacks the first-tier US macro updates while the Canadian Housing data around 1230 GMT and EIA Crude Stocks data (at 1430 GMT) could offer some trading incentives ahead of the US FOMC March 15 meeting’s minutes release at 1800 GMT. The market would look for any clues on the central bank’s thinking, especially in light of last month’s emergency rate cut and QE announcements.

Meanwhile, oil price action alongside the dollar dynamics will be also closely eyed ahead of Thursday’s OPEC+ meeting.

EUR/USD struggles to extend Tuesday’s gain as coronavirus worries return

EUR/USD is flashing red while heading into the London open, marking a weak follow-through to Tuesday’s 0.92% rise from 1.08 to 1.0926. The downside in EUR/USD will likely gather pace if the European equities open on a negative note in response to the renewed virus concerns. 

GBP/USD: Pressured above 1.2300 amid UK’s coronavirus crisis

GBP/USD fails to hold onto recovery gains amid fresh coronavirus concerns. UK PM is in ICU but stable, doubts over the already higher statistics remain. Expectations are mounting that the UK will have Europe’s worst crisis due to the virus.

US FOMC Minutes Preview: How worried was the Fed on March 15?

The minutes of the Fed’s second emergency meeting in March. Central bank announced a $700 billion bond purchase program. Turning point in the credit and currency markets.