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Coronavirus Continues to Dominate Market Developments, Safe Haven Focus

Pound News: Sterling Driven by Rivals amid Lack of Support

The pandemic of coronavirus Covid-19 continues to weigh on the Pound, but Sterling is being driven more by the strength of major currency rivals. Sterling has fallen against the highly appealing Euro but is climbing against the weak Canadian Dollar, for example.

Britain’s latest job market results will be published today. They are likely to be brushed over in favour of continued market focus on Covid-19, however.

Euro News: EUR Continues to Capitalise on Safe Haven Demand

The Euro’s strength faltered slightly last week, but fresh US Dollar weakness yesterday meant that the Euro was once again benefitting from safe haven demand. This is keeping the Euro one of the market’s most appealing major currencies despite the large number of coronavirus cases in Italy.

Safe haven demand will keep benefitting the Euro until the US Dollar sees a more sustained recovery. This means coronavirus news will likely overshadow today’s economic sentiment data for Germany and the Eurozone.

US Dollar News: Federal Reserve’s Second Emergency Rate Cut Weighs on USD

The Federal Reserve announced another emergency interest rate cut on Sunday night. As a result, the US Dollar’s rebound rally that began last week hit a pause yesterday, making it easier for US Dollar rivals to climb.

Key US retail sales results will be published today. They could give investors a better idea of US economic resilience, but the US Dollar is more likely to advance if Fed jitters soften and the currency benefits from safe haven demand again.

Canadian Dollar News: Oil Price Fears Keep CAD from Capitalising on Fiscal Stimulus

The Canadian Dollar’s brief strength on the Canadian government’s fiscal stimulus plans was short-lived. Yesterday saw the Canadian Dollar tumble against most major currencies as oil prices continued to fall and Bank of Canada (BoC) rate cut bets rose further.

As optimism around fiscal stimulus wears off, the oil price war and coronavirus developments will continue to weigh heavily on the Canadian Dollar today.

Australian Dollar News: Risk-Aversion and RBA Speculation Keeps AUD Pressured

The risk and trade-correlated Australian Dollar remains one of the market’s least appealing major currencies amid the coronavirus pandemic. Investors are hesitant to move too much on AUD ahead of upcoming RBA news though.

The Reserve Bank of Australia (RBA) is expected to announce policy on Thursday, and markets are now anticipating an emergency interest rate cut. This is likely to be the focus of AUD trade for a few days.

 

Upcoming Data

Tuesday, 17th March

00:30    RBA Meeting Minutes

09:30    UK Job Market Report

10:00    German and Eurozone ZEW Economic Sentiment

12:30    Canadian Manufacturing Sales

12:30    US Retail Sales

13:15    US Manufacturing and Industrial Production

 

James Spurway
Director of Sales and Dealing

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