- EUR/USD rose above 1.09 in Asia as markets offered dollar on the US fiscal stimulus hopes.
- Markets brace for the US jobless claims with talk it could exceed 1 million.
EUR/USD jumped to 1.0934 in Asia, erasing nearly 35 percent of the sell-off from 1.1495 to 1.0636 witnessed in the two weeks to March 23.
The spot crossed above 1.09 on the back of broad-based US dollar weakness. Markets offered greenback, possibly in hopes of the US fiscal stimulus.
As per the latest reports, the coronavirus fiscal stimulus bill has finally passed the US Senate and could be put to vote in the lower house on Friday. As a result, the global equities could extend Wednesday's relief rally, leading to deeper losses in the safe-haven US dollar and further gains in EUR/USD.
US jobless claims eyed
"Thursday’s jobless claims report will be a big test for the dollar’s safe-haven status. Economists are looking for claims to rise to 1.5 million, but they could be much worse," noted BK Asset Management's Kathy Lien.
The Initial Jobless Claims are forecasted to have risen to 1,000K in the week ended March 20 from the preceding week's 281K figure. If jobless claims are in the 2 to 3 million range, which is completely feasible, we could see a significant sell-off in the US dollar, according to Lien. In that case, the EUR/USD spot could find acceptance above the 50-day moving average at 1.10.
Apart from the jobless claims, the pair could also take cues from the Kansas Fed Manufacturing Activity index for March. Meanwhile, the European Union is holding an emergency summit to discuss further measures to fight the virus. There is consensus in the market that the Eurozone is headed for a deep recession and needs aggressive stimulus to stem the fallout from the virus outbreak.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD jumps above 0.6500 after hot Australian CPI data
AUD/USD extended gains and recaptured 0.6500 in Asian trading, following the release of hotter-than-expected Australian inflation data. The Australian CPI rose 1% in QoQ in Q1 against 0.8% forecast, providing extra legs to the Australian Dollar upside.
USD/JPY hangs near 34-year high at 154.88 as intervention risks loom
USD/JPY is sitting at a multi-decade high of 154.88 reached on Tuesday. Traders refrain from placing fresh bets on the pair as Japan's FX intervention risks loom. Broad US Dollar weakness also caps the upside in the major. US Durable Goods data are next on tap.
Gold price cautious despite weaker US Dollar and falling US yields
Gold retreats modestly after failing to sustain gains despite fall in US Treasury yields, weaker US Dollar. XAU/USD struggles to capitalize following release of weaker-than-expected S&P Global PMIs, fueling speculation about potential Fed rate cuts.
Crypto community reacts as BRICS considers launching stablecoin for international trade settlement
BRICS is intensifying efforts to reduce its reliance on the US dollar after plans for its stablecoin effort surfaced online on Tuesday. Most people expect the stablecoin to be backed by gold, considering BRICS nations have been accumulating large holdings of the commodity.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Fed might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.