Here is what you need to know on Friday, March 20:
The US dollar takes a breather and is retreating after raging across the board throughout the week, as stocks find some calm after a wild week amid the coronavirus crisis. The respiratory disease has already taken the lives of over 10,000 people worldwide, with over 244,000 infected.
The Federal Reserve expanded its dollar swap program to additional central banks on Thursday after the initial move on Sunday to ease the pressure on the greenback. In the US, California issued a state-wide order to stay at home and New York mayor Bill de Blasio warned the city could run out of medical supplies. Lawmakers in Washington continue working on a relief bill aimed to be concluded by Monday. Other states may follow California.
EUR/USD is trading at the 1.07 handle after hitting 1.0652 on Thursday, the lowest since 2017. The European Central Bank introduced a new Quantitative Easing worth €750 billion to support vast government spending in Europe as several countries are under lockdown.
Italy has surpassed China in the number of deaths from coronavirus and is considering extending and deepening its restrictions. The disease continues spreading in Germany, France, and Spain with the latter seeing hospitals filling up.
GBP/USD is trading at the 1.16 handle after ranging over 300 pips on Thursday. The Bank of England surprised with the second rate cut in a week and also enlarged its QE program by £200 billion, an increase of around 45%. The move came as the new governor Andrew Bailey and his colleagues feared disorderly market action as Brits braced for a lockdown.
See Is money printing positive for currencies? Lessons from Lagarde's largesse, Bailey's bailout
Prime Minister Boris Johnson said Britain could turn the tide within 12 weeks after closing schools and taking other measures. Chancellor of the Exchequer Rishi Sunak is set to introduce new measures to support the economy later in the day. Brexit talks in doubt: David Frost, Chief UK Brexit negotiator is in self-isolation after showing symptoms of Covid-19 and as his European counterpart said he tested positive.
Oil prices have been surging into Friday, with WTI already some 30% off the lows of nearly $20 on Wednesday. The Canadian dollar has recovered, with USD/CAD trading at the 1.43 handle after topping 1.46 earlier this week. Canadian retail sales figures for January, before the crisis, are on the agenda today.
AUD/USD is also bouncing from the 17-year lows and is around at the 0.58 handle as the Reserve Bank of Australia began implementing its QE program. NZD/USD is also some 100 pips higher on the day, at the 0.57 handle.
USD/JPY is battling 110 after surpassing the round number on Thursday. The currency pair is moving with the dollar with the yen losing its safe-haven status.
US weekly jobless claims leaped to 281,000 from 211,000 in the first sign that the crisis is set to trigger unemployment. President Donald Trump has reportedly asked states not to publish employment figures while Goldman Sachs sees unemployment hitting 2.25 million. US Existing Home Sales for February are due out today
On Wall Street, a considerable amount of options expire on Wall Street, in what is called "quadruple witching" – that usually causes high volatility. With markets already wild, it could add fuel to the fire.
Cryptocurrencies are on the rise with Bitcoin topping $6,000 and other digital assets following suit.
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.