Market Review - 28/03/2020 02:48GMT
Dollar falls broadly on global stimulus hopes
The greenback erased intra-day gains made in Asia and Europe and extended its recent decline ending lower against majority of its peers on Friday, posting its biggest weekly decline since 2009 as central banks and governments around the world rolled out stimulus measures to limit economic fallout from COVID-19 pandemic.
Versus the Japanese yen, dollar extended Thursday's selloff and fell from 109.70 in Australia to 108.25 in Asia on sharp fall in the U.S. Treasury yields and the Nikkei 225 before rebounding to 109.06 in Europe on short-covering but only to tumble again to an 8-day low of 107.77 in New York on renewed usd's weakness.
Although the single currency gained from 1.1024 in Australia to 1.1086 in Asian morning, price met renewed selling and fell to session lows of 1.0954 in New York morning on cross-selling in euro. However, the pair quickly erased its losses and rallied in tandem with sterling to a 9-day high of 1.1147 near the close on renewed usd's weakness.
The British pound went through a volatile session. Cable remained on the front foot in Asia and gained to 1.2306 before paring its gains and weakened to 1.2145 in European morning on profit-taking. However, the pair then rebounded to 1.2295 and despite a brief but sharp retreat to 1.2182 on news reported that UK Prime Minister Boris Johnson tested positive for COVID-19, the pound later rallied to a near 2-week high of 1.2485.
Reuters reported British Prime Minister Boris Johnson has tested positive for coronavirus and is self isolating but will still lead the government's response to the outbreak. "Over the last 24 hours I have developed mild symptoms and tested positive for coronavirus," Johnson said. "I am now self-isolating, but I will continue to lead the government's response via video-conference as we fight this virus."
In other news, Reuters reported Dallas Fed President Robert Kaplan on Friday said small businesses can expect to be able to borrow money backstopped by the Fed "very quickly" under a new program the U.S. central bank is readying to bolster firms hurt by the coronavirus epidemic. Under the new Main Street lending program, the Fed would likely provide credit support to commercial banks so they can lend to small businesses, Kaplan said in an interview on Bloomberg TV. "You can be sure that we are working furiously here at the Fed to have this in place and work out the details. And you can have confidence that we are going to do that," he said. Kaplan said he expects GDP to drop steeply in next quarter and unemployment to rise to the mid teens before falling to around 7% to 8% by year end.
On the data front, Reuters reported U.S. consumer spending rose moderately in February and momentum is set to fade rapidly in the coming months, with the coronavirus pandemic upending life for Americans. The Commerce Department said on Friday consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.2% last month after rising by the same margin in January. Economists polled by Reuters had forecast consumer spending gaining 0.2% in February.
Data to be released this week :
UK nationwide house price, Swiss KOF indicator, EU business climate, economic sentiment, industrial sentiment, services sentiment, consumer confidence, Germany CPI, HICP and U.S. pending home index, pending sales, Dallas Fed manufacturing business index on Monday
Japan housing starts, unemployment rate, industrial output, retail sales, New Zealand NBNZ business outlook, NBNZ own activity, China NBS non-manufacturing PMI, NBS manufacturing PMI, UK GfK consumer confidence, GDP, current account, Swiss retail sales, France consumer spending CPI (EU norm), CPI, producer prices, Germany import prices, unemployment change, unemployment rate, Italy consumer price, CPI (EU norm), producer prices, EU HICP, HICP core, Canada GDP, producer prices and U.S. redbook, CS home price, Chicago PMI, consumer confidence on Tuesday.
Japan Tankan big manufacturing index, Tankan big manufacturing outlook, Tankan big non-manufacturing index, Tankan big non-manufacturing DI, Tankan small manufacturing index, Tankan small manufacturing outlook, Tankan small non-manufacturing index, Tankan small non-manufacturing DI, construction orders, Jibun Bank manufacturing PMI, Australia building approvals, China Caixin manufacturing PMI, Germany Markit manufacturing PMI, retail sales, Swiss manufacturing PMI, Italy Markit manufacturing PMI, unemployment rate, France Markit manufacturing PMI, EU Markit manufacturing PMI, unemployment rate, UK Markit manufacturing PMI, U.S. MBA mortgage application, ADP national employment, Markit manufacturing PMI, construction spending, ISM manufacturing PMI and Canada Markit manufacturing PMI on Wednesday.
Japan monetary base, Swiss CPI, Germany exports, imports, trade balance, current account, EU producer prices, U.S. international trade, goods trade balance, initial jobless claims, ISM-New York index, durable ex-defence, durable goods, durables ex-transportation and Canada trade balance, exports, imports on Thursday.
Australia AIG construction index, retail sales, China Caixin services PMI, France budget balance, Italy Markit services PMI, GDP, France Markit services PMI, Germany Markit services PMI, EU Markit services PMI, retail sales, UK Markit services PMI and U.S. non-farm payrolls, private payrolls, unemployment rate, average earnings, Markit services PMI, ISM non-manufacturing PMI on Friday.
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