Breaking: USD surges on funding stress, AUD/USD breaks 0.60, GBP/USD under 1.21, EUR/USD nears 1.10

Yohay Elam FXStreet

The demand for dollar is surging amid a global sell-off of stocks related to the coronavirus crisis. There is growing fear of over USD shortage.

EUR/USD is trading near 1.10, close to the monthly lows. GBP/USD has extended its slump, flirting with 1.21, the lowest since September. AUD/USD is around 0.60, a level that was last seen in 2003. The greenback is gaining ground across the board, beating assets that are usually safe-haven ones such as the Japanese yen and Gold. XAU/USD is trading below $1,470.

Reuters reports that excessive US swap prices show the US dollar funding situation worsening. Dealers say overnight (T/N) EUR/USD swap 10% vs 0.15% on a regular day. The Benchmark 3-month EUR basis swap is -124 basis points - new high since 2012, and that was -154 in 2012 and -305 basis points during 2008 financial crisis. Large corporations said to be drawing down on available credit lines. Amid fears of further USD shortages, exacerbating the issue.

Apart from the Aussie's spectacular fall, other commodity currencies are suffering. NZD/USD is trading around 0.5950 and USD/CAD is nearing 1.40.

More: Trading Volatility: Resist the temptation to pick tops and bottoms

Here is the monthly AUD/USD chart, showing the depths of the fall:

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

EUR/USD recovers above 1.1600 as focus shifts to US data

EUR/USD stages a modest rebound and trades in positive territory above 1.1600 in the European session on Wednesday. Improving risk sentiment makes it difficult for the US Dollar to preserve its strength and helps the pair edge higher as focus shifts to key US data releases.

GBP/USD climbs above 1.3350 on improving risk mood

GBP/USD gains traction and advances toward 1.3400 on Wednesday. Although there are no headlines pointing to a de-escalation in the Middle East conflict, the modest recovery seen in US stock index futures limit the USD's gains and help the pair hold its ground.

Gold rebounds toward $5,200 as USD retreats

Gold maintains its offered tone through European session on Wednesday and climbs to the $5,200 region. The downward correction seen in the US Dollar and the ongoing crsis in the Middle East seem to be allowing XAU/USD to preserve its recovery momentum.

ADP Employment Report set to signal stronger February jobs growth, little effect on Fed outlook

The Automatic Data Processing (ADP) Research Institute will release its monthly report on private-sector job creation for February on Wednesday. The so-called ADP Employment Change report is expected to show that the United States private sector added 50K new positions in the month, following the 22K gained in January.

Asian stocks fall as South Korea’s KOSPI slumps over 10%

Asian equities drop on Middle East tensions; the MSCI Asia Pacific Index falls up to 4%. South Korea’s KOSPI fell 10.71% near 5,170, with the Korean Won weakened past 1,500 per dollar.

Solana Price Forecast: SOL consolidation near resistance as ETF inflows offer mild support

Solana price is facing slight rejection as it approaches the upper boundary of the consolidation range at around $88 on Wednesday. Institutional demand is strengthening as spot Exchange Traded Funds recorded two consecutive inflows so far this week.