Forex Today: Relief measures far from enough to end the crisis

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Here is what you need to know on Monday, March 16h:

  • Europe has become the new epicentre of the coronavirus pandemic, with cases in Italy and Spain growing exponentially, but also rising in Germany, France and other countries. Lockdown, travel bans, and activity suspensions are taking place all over the world.
  • Sweden and the UK are taking lighter measures, resulting in the Pound plummeting. GBP/USD settled sub-1.2300.
  • King Dollar surged as measures were taken in the US. The US Federal Reserve announced stimulus measures through repo operations and bond-buying. US President Trump declared a national emergency and spared as much as $50 billion in financial resources to counter the negative economic effects of the coronavirus crisis.
  • The EUR/USD settled at 1.1100, retreating further from Monday’s high at 1.1496 amid continued dollar’s demand.
  • US President Trump menaced to remove Fed’s Chair Jerome Powell.
  • Central banks keep slashing rates. On Friday, the BOC cut its main benchmark by 50bps, the second rate cut this month.  
  • Wall Street recovery nicely on Friday, with the three major indexes up by over 9.0% each after the stimulus measures announced by the Fed and President Trump. Treasury yields also recovered, with the yield on the benchmark 10-year note around 1.0%.
  • Safe-haven yen and gold edged lower against the greenback. Spot settled at $1,530.00 a troy ounce.
  • Crude oil prices recovered modestly as the war between Saudi Arabia and Russia continues. WTI settled around $33.00 a barrel.
  • The better market mood may well be temporal, as a global economic downturn seem now inevitable. The measures taken by governments and central banks are just palliative. Risk aversion will likely keep dominating the financial world.
  •  Cryptocurrencies consolidated over the weekend, after collapsing mid-week.
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