Forex Today: Coronavirus fears subside, trio of central bankers set to move USD, EUR, GBP
|Here is what you need to know on Tuesday, February 11:
The coronavirus' death toll has topped 1,000 as the disease continues spreading, but the infection rate seems to have stabilized. Stock markets around the world have turned up and the safe-haven US dollar, Japanese yen, and Gold are all on the back foot. Investors are encouraged by the relatively low mortality rate and the return of Chineses factories to business. However, conferences are coming under cancelation pressures.
Jerome Powell, Chairman of the Federal Reserve, goes to Capitol Hill for his bi-annual testimony. While the Fed intends to leave rates unchanged, bond markets are pricing a rate cut in September. Powell may open the door to slashing borrowing costs later down the line, especially if the virus causes significant economic damage.
See Powell Preview: Pleased but wary
Christine Lagarde, President of the European Central Bank, will also meet lawmakers and may shed more light on current conditions and on the bank's intentions. The ECB is conducting its strategic review, with Lagarde reported aiming to conclude it in July. EUR/USD is trading close to the 2019 lows.
Mark Carney, Governor of the Bank of England, completes the trio of central bankers as he testifies before a committee in the House of Lords. The outgoing governor may comment on GDP figures.
The UK is expected to report zero Gross Domestic Product growth in the fourth quarter, after expanding by 0.4%. The government plans to announce massive infrastructure spending to boost the economy, including the controversial HS2 plan.
Brexit: Ahead of talks about future relations, UK Chancellor of the Exchequer Sajid Javid wants the UK to set its own rules but retain some level of equivalence with the EU. Brussels has also presented more details about its aims, and both sides are placing themselves far apart, risking a no-trade-deal Brexit. Sterling is shrugging this off.
German Chancellor Angela Merkel will take an active role in choosing a new successor after her CDU's party leader Annegret Kramp Karrenbauer stepped down following political missteps. The ruling grand coalition in Europe's largest economy remains vulnerable.
Oil prices have stabilized with WTI hovering around $50 as markets assess the potential drop in demand and Russia's reluctance to cut production.
Cryptocurrencies are on the back foot, correcting some of their recent gains, with Bitcoin trading below $9,800.
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