Forex Today: Dollar down, stocks up on three encouraging factors, PMIs and coronavirus news eyed

Here is what you need to know on Tuesday, March 24:

The market mood is positive with stocks rising and the US dollar retreating amid several upbeat developments related to coronavirus. It is the US dollar vs. the rest and the greenback is on the losing side.

First, US: Republicans and Democrats in the Senate are nearing a deal on the massive fiscal stimulus that could reach $2.5 trillion, after failing to do so on Monday. While President Donald Trump bashed House Speaker Nancy Pelosi, those involved in talks are optimistic. In the meantime, additional US cities and states are imposing restrictions. Trump prefers lifting the curbs as soon as possible to prevent economic damage. 

The second positive factor is the Federal Reserve's open-ended Quantitative Easing program announced on Monday, which guarantees most US debt and provides a cushion to investors. While it currently weighs on the dollar, it could boost it later on.

See Why the Fed´s unlimited money-printing scheme is dollar positive in coronavirus times – three reasons

The third factor is the encouraging news from Italy, where the death toll from Covid-19 has dropped for the second day in a row, providing encouragement to other countries on the continent such as Spain, where the pace of mortalities continues rising. Markit's preliminary Purchasing Managers' Indexes for March will shed light on how companies are seeing their businesses moving forward.

See Eurozone PMIs Preview: How calamitous is the coronavirus carnage? Three scenarios for EUR/USD

The German government has signed off an economic package worth €750 billion and is also willing to rescue Italy, the hardest-hit country. Chancellor Angela Merkel has tested negative for the virus.

In the UK, Prime Minister Boris Johnson instructed Brits to stay at home for three weeks, in an effort to stop the spread of the disease, mimicking countries on the continent. GBP/USD was on the back foot on Monday and is attempting recovery on Tuesday.

Business sentiment will be tested with Markit's preliminary PMIs.

See UK PMIs Quick Preview: First coronavirus-linked read is a lose-lose situation for GBP/USD

South Korea, New Zealand, and Japan – where the Olympics will likely be postponed – have announced new stimulus measures.

China's Hubei province – where coronavirus originated – will remove travel restrictions on April 8, two and half months after the lockdown was imposed. 

Gold has been extending its recovery, rising above $1,550, buoyed mostly by the Federal Reserve. Goldman Sachs sets $1,800 as a target for the precious metal. Oil is also on the rise, topping $24 amid the better market mood and despite oversupply issues.

Cryptocurrencies are holding onto the gains they achieved on Monday, related tot he Fed's stimulus.

Later in the day, G7 finance ministers and central bankers will hold a video conference, yet expectations for coordinated action remain low. More importantly, Markit's preliminary PMIs for the US will provide insights on how the world's largest economy is coping:

See Markit US PMI Preview: How bad is bad?