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Forex Today: Biden boosts mood after Fed's coronavirus cut fails, critical US data eyed

Here is what you need to know on Wednesday, March 4:

US politics: Centrist Joe Biden is emerging as the new front-runner in the Democratic Party's "Super Tuesday" of primaries. Nevertheless, left-leaning Bernie Sanders has won California – the largest state – and the race continues. The market mood improved amid Biden's apparent lead, with commodity currencies on the rise and the safe-haven yen on the back foot. 

See Biden dominates Super Tuesday returns but nomination remains elusive

Earlier, the Federal Reserve's unscheduled double-dose cut of 50 basis-point failed to lift the market mood. The Fed's response to the coronavirus crisis is seen as falling short of shoring markets. Investors are looking for additional reductions to borrowing costs and perhaps more importantly – fiscal stimulus.

The surprise move sent bond yields plunging with the benchmark ten-year yields plunging below 1%. However, the dollar's reaction was mixed against the euro and the pound while it lost to the yen and commodity currencies. Gold surged back to around $1,650. Oil prices 

See Fed Coronavirus Cut Analysis: Sell opportunity on stocks? Sugar rush cannot solve the supply problem

Ahead of the Fed, finance ministers and central bankers of the Group of Seven (G7) pledged to support their economies in the wake of the crisis, but refrained from making specific commitments and disappointed markets. 

Coronavirus latest: The respiratory disease continues spreading around the world with Brazil joining the list of hot spots including Italy, Iran, South Korea, and China. The mortality rate of Covid-19 is estimated at 3.4% among those reaching out for treatment. 

China's Caixin Non-MAnufacturing Purchasing Managers' Index plummeted to 26.5 – a record low – and worse than the official Services PMI.

The Bank of Korea is set to follow the Fed with a rate cut and is the Bank of Canada. Expectations have risen from a 25bp cut to a 50bp one. The Canadian economy had been struggling with weak consumption before the current health crisis. 

See BOC Preview: Buy the coronavirus cut rumor, sell USD/CAD on the fact? Five scenarios

AUD/USD is bid after Australia's Gross Domestic Product for the fourth quarter beat expectations with 0.5%. 

Critical US figures are eyed. ADP's private-sector jobs report is set to show a sub-200K increase in positions in February after a leap of 291,000 in January. It serves as a clue toward Friday's official Non-Farm Payrolls.

See ADP Employment Change Preview: Fears but few facts

The ISM Non-Manufacturing PMI is forecast to show ongoing growth in America's largest sector. The employment component serves as another hint toward the NFP.

See ISM Non-Manufacturing PMI Preview: The Fed, US Treasuries, and the dollar

Cryptocurrencies have been bid, with Bitcoin edging closer to $9,000.

Author

Yohay Elam

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.

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