Forex Today: Dollar dominates after the coronavirus crash amid Trump's tax promises, Chinese hopes

Yohay Elam FXStreet

Here is what you need to know on Tuesday, March 10:

After Monday's coronavirus-correlated bloodbath in markets, Asian stocks and S&P futures are up, yields are on the rise, and the dollar bounced from its lows. USD/JPY tops 104 in a 2% leap, while EUR/USD is below 1.14, and GBP/USD under 1.31. Gold is pressured at around $1,660 after temporarily topping $1,700 early on Monday.

Oil prices, which have plummeted also due to Saudi Arabia's decision to start a price war, is even jumping with WTI at around $33. The collapse of the OPEC+ pact with Russia triggered the Saudi move.

The bounce is a mix of correction and optimism about China. President Xi Jinping visited Wuhan, the epicenter of the disease. Moreover, the wold's second-largest economy will issue "green cards" for those free of the illness.

In the US, President Donald Trump is considering a payroll tax cut and other relief measures in response to the crisis. More details are due later on Tuesday. The news also helps sentiment.

Mark Meadows, his Chief of Staff, is in self-isolation after coming in contact with a person carrying the virus, but the president has not been tested. Many fear that the slow pace of testing in the world's largest economy implies many more cases will show up later on.

On Monday, trading was halted on Wall Street for the first time since the financial crisis in a massive sell-off. See: Coronavirus Crash: Five reasons why markets are in full panic mode and why it is here to stay

The situation in the old continent remains dire. After another jump of around 2,000 infections and 100 deaths, Italian PM Giussepe Conte announced that all of Italy is now under the most severe restrictions. Over the weekend, travel limit and event bans were limited to only a quarter of the population. Germany, France, and Spain have confirmed over 1,000 cases each. School has been called off in the Madrid region, and France forbids events of over 1,000 people.

Japanese PM Shinzo Abe is pushing through a law that would allow emergency powers and also working on stimulus measures. Worldwide, the number of infections tops 114,000, over 64,000 recovered, and 4,000 have died.

In US politics, centrist Joe Biden aims to extend his lead over left-leaning Bernie Sanders in another round of voting in the Democratic Party's primaries. Biden's decisive victory in "Super Tuesday" was cheered by markets.

Cryptocurrencies have stabilized with Bitcoin trading near $1,660.

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.

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