Euro jumps on Dollar weakness, European shares turns choppy, Gold falls, Oil prices fall as demand woes eclipse U.S. stimulus-march 25th,2020
• UK Feb CPI (MoM) 0.4%,0.3% forecast, -0.3% previous
• UK Feb CPI (YoY) 1.7% , 1.7% forecast, 1.8% previous
• UK Feb PPI Input (YoY) -0.5%,-0.9% forecast, 1.6% previous
• UK Feb PPI Input (MoM) -1.2%,-2.0% forecast, 0.3% previous
• German March Business Expectations 79.7, 81.9 forecast, 93.1 previous
• German March Current Assessment 93.0, 93.6 forecast, 99.0 previous
• German March Ifo Business Climate Index 86.1, 87.7 forecast, 96.0 previous
• US March CBI Distributive Trades Survey -3, -12 forecast, 1 previous
• US Feb Core Durable Goods Orders (MoM) -0.4% forecast,0.8% previous
• US Feb Durable Goods Orders (MoM) -0.8%,-0.2% previous
Looking Ahead - Economic Data (GMT)
• 13:00 US Jan House Price Index (MoM) 0.6% previous
• 13:00 US Jan House Price Index (YoY) 5.2% previous
• 13:00 US House Price Index 283.0 previous
• 14:30 US Crude Oil Inventories 2.774M, 1.954M previous
• 14:30 US Gasoline Inventories -0.657M forecast, -6.180M previous
• Brazil CAGED Net Payroll Jobs 70.00K forecast, -307.31K previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
EUR/USD: The euro strengthened on Wednesday after policymakers in Europe and the United States approved extraordinary measures to lessen the impact of the coronavirus crisis. U.S. senators and officials in President Donald Trump’s administration agreed on a massive economic stimulus bill to alleviate the economic impact of the coronavirus outbreak. Meanwhile, European Central Bank (ECB) head Christine Lagarde asked euro zone finance ministers on Tuesday to seriously consider a one-off joint debt issue of “coronabonds” to help fight the epidemic. The euro was last up nearly 0.3% versus the greenback after losing some of its early gains, changing hands at $1.08145. Immediate resistance can be seen at 1.0848 (50% fib), an upside break can trigger rise towards 1.0891 (61.8%fib).On the downside, immediate support is seen at 1.0779 (38.2% fib), a break below could take the pair towards 1.0741 (23.6% fib).
GBP/USD: Sterling extended its rally on Wednesday as the safe-haven U.S. dollar fell across the board on some signs of stabler risk conditions amid the coronavirus crisis. Investors found some comfort that the severe impact of COVID-19 on Britain’s economy could be somewhat alleviated by financial stimulus from both the Bank of England and government. Investors found some comfort that the severe impact. The pound was last trading at $1.1831, having hit earlier a one-week high of $1.1971. Immediate resistance can be seen at 1.1967 (61.8% fib), an upside break can trigger rise towards 1.2000 (Psychological level).On the downside, immediate support is seen at 1.1831 (50% fib), a break below could take the pair towards 1.1700 (38.2% fib).
USD/CHF: The dollar was little changed against the Swiss franc on Wednesday after U.S. politicians agreed a $2 trillion stimulus package that steadied money market nerves and prompted investors to buy back into ‘riskier’ currencies. Panicked investors fearful about the coronavirus pandemic had liquidated almost everything for U.S. dollars, with the world’s most liquid currency seen as a haven in times of crisis.U.S. Senate majority leader Mitch McConnell announced a breakthrough on a package to shield the world’s largest economy from the economic fallout of the outbreak. It will be put to a vote on Wednesday. Immediate resistance can be seen at 0.9886 (300 DMA), an upside break can trigger rise towards 0.9936(Higher BB).On the downside, immediate support is seen at 0.9781 (Daily low), a break below could take the pair towards 0.9714 (9 DMA).
USD/JPY: The dollar edged higher against the Japanese yen Wednesday after U.S. senators and Trump administration officials reached an agreement on a giant economic stimulus bill to alleviate the economic impact of the coronavirus outbreak. The U.S. stimulus deal, billed as a $2 trillion package, is expected to include $500 billion in direct payments to people and $500 billion in liquidity assistance. The biggest uncertainty is on how countries can slow the pandemic and how quickly they can lift various curbs on economic activity. Strong resistance can be seen at 111.51 (38.2% fib), an upside break can trigger rise towards 112.40 (23.6% fib).On the downside, immediate support is seen at 110.78 (50 % fib), a break below could take the pair towards 110.07 (61.8 % fib).
European stocks turned choppy again on Wednesday with bourses across the region wiping off most of their early morning gains as a sharp rise in the coronavirus death toll brought back panic.
At (GMT 13:33),UK's benchmark FTSE 100 was last trading up at 0.84 percent, Germany's Dax was down by 1.53 percent, France’s CAC finished was up by 0.64 percent.
Gold prices fell on Wednesday, after a steep rise in the previous session, as a flight to cash offset optimism around the U.S. government agreeing on a massive stimulus package to ease the economic burden of the coronavirus pandemic.
In volatile trade, spot gold fell 1% to $1,594.18 per ounce by 0743 GMT, after rising as much as 1.6% earlier in the day. The metal jumped more than 3% on Tuesday.U.S. gold futures climbed 0.2% to $1,664.80.
Oil prices fell on Wednesday as faltering fuel demand because of of the coronavirus pandemic outweighed a massive pending U.S. economic stimulus package.
Brent crude was down 84 cents, or 3.1%, at $26.31 a barrel at 1154 GMT after touching a low of $25.68.U.S. crude was down 29 cents, or 1.2%, at $23.72 after a low of $23.15.
Eurozone government bonds steadied on Wednesday after policymakers in Europe and the United States approved extraordinary measures to lessen the impact of the coronavirus crisis, although stock markets suffered some losses.
Germany’s 10-year government bond, the benchmark for the region, saw its yield edge a basis points higher to -0.31%, a move mirrored by other high-grade government bonds.
Italian 10-year borrowing costs were unchanged at 1.59%; nearly half last week’s high of 3.01%.