Pound (GBP) Rally Runs Out of Steam
The Pound (GBP) initially got off to a strong start yesterday, extending Tuesday’s gains as the UK finally introduced a coronavirus lockdown.
However, these gains began to evaporate through the second half of the European session amid a rebound in the US Dollar (USD).
Coming up this afternoon will be the Bank of England’s (BoE) latest policy meeting. Unlike the Federal Reserve the BoE hasn’t seen fit to cancel its scheduled meeting this month in spite of implementing two emergency cuts already, stoking speculation the bank may be planning further action.
Euro (EUR) Muted on Gloomy Germany Business Climate
The Euro (EUR) struggled to find any upward momentum on Wednesday after Germany’s final business climate index was revised even lower this month as the country wrestles with the coronavirus crisis.
But it wasn’t all doom and gloom as reports of new coronavirus infections in Italy continued to fall, stoking hopes that there may be a light at the end of the tunnel.
Should this downtrend in cases persist into the latter half of the week we may see the Euro attempt to break higher.
US Dollar (USD) Bounces Back
The US Dollar (USD) initially stumbled yesterday, with the passing of a $2 trillion stimulus package helping to bolster market sentiment and curb demand for the safe-haven ‘Greenback’.
However, the US Dollar was able to recoup these losses later in the session after being buoyed by a stronger-than-expected US durable goods reading as well as an upswing in US treasury yields.
In the spotlight today will be the publication of the weekly US initial jobless claims report.
After rising to a two-year high of 281,000 for the week ending March 14, USD investors are bracing for a potential rise in the millions as the coronavirus crisis struck US firms.
Canadian Dollar (CAD) Rallies After Commons Backs Canada’s Stimulus Bill
The Canadian Dollar (CAD) roared higher on Wednesday as the House of Commons passed a CA$82bn coronavirus relief bill, bolstering hopes the fiscal stimulus will help support Canada’s economy through the crisis.
Australian Dollar (AUD) Dented in Risk-Off Trade
The Australian Dollar (AUD) trended lower overnight on Wednesday, with the risk sensitive ‘Aussie’ giving ground as markets remain jittery amid the coronavirus crisis.
New Zealand Dollar (NZD) Drops on US Coronavirus Concerns
The New Zealand Dollar (NZD) also suffered some losses in overnight trade as surging coronavirus cases in the US weighed on market sentiment, limiting the appeal of the ‘Aussie’.