Forex Today: Easter Monday limits market moves amid virus-led risk-off, WTI hesitates to cheer OPEC+ deal
- Asian session remains mostly illiquid amid off at Australia, New Zealand.
- A lack of major data/events from China, Japan also contributes to the market’s inactivity.
- Coronavirus-led risk aversion regains attention as the US tops Italy to be the global hotspot.
- WTI’s latest recovery still fails to justify OPEC+ production cut.
Forex today in Asia remains a dull affair amid Easter Monday holidays in key markets, except for Japan and China. Also restricting the market’s activity was a lack of major/events on the economic calendar. Even so, the US dollar pulls back amid the coronavirus-led risk-off whereas Gold fails to benefit from the risk aversion, maybe due to the greenback recovery. Further, WTI hesitantly cheers the OPEC+ deal, following the initial losses, as the market compares it with initial expectations of 20 million barrels a day of cuts.
It’s worth mentioning that the coronavirus (COVID-19) has so far resulted in 114,000 deaths, not to forget above 1.8 million cases, on a global basis. For the US, the numbers of cases have crossed 556,000 mark, as per CNN, while the death toll rose to 22,073 according to data from Johns Hopkins University. Elsewhere, figures from China keep citing the receding strength of the deadly virus while South Korean data also marked optimism with new cases to a seven-week low.
Among the majors, EUR/USD bears the burden of USD bounce but GBP/USD benefits from the UK PM Johnson’s exit from the hospital but fails to ignore Chancellor Sunak’s downbeat GDP forecast. Moving on, USD/JPY drops due to the yen’s safe-haven status whereas USD/CAD and USD/CHF stay mostly unchanged. Additionally, AUD/USD and NZD/USD fails to defy the risk aversion as the world’s largest economy tops Italy to be the global hotspot of the pandemic.
Main topics in Asia
OPEC+ decision would put a floor under oil prices - BNP Paribas
US economy will contract 40% in Q2 - JP Morgan
Goldman Sachs calls historic OPEC+ oil output cut deal as insufficient
China’s Hubei province reports zero new coronavirus cases
UK Chancellor: Potential for a 30% drop in UK GDP – The Times
Iraqi Oil Minister: Massive oil output cut deal will help lover inventories and boost prices
Fed’s Kashkari: US economy faces 'long, hard road' to recover from coronavirus
US Pres. Trump: We are winning, and will win, the war on the Invisible Enemy!
OPEC+ agrees oil output cuts of 9.7 mln bpd
Key focus ahead
Considering the lack of major data/events on the economic calendar, forex traders will keep eyes on the virus updates for fresh impulse. However, any surprise announcements from the Fed and/or Trump administration could also move the markets. Elsewhere, updates from the International Energy Agency (IEA) could also offer intermediate moves to oil prices.
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BoC: On hold but keeping its powder dry in its full-year forecast, 1.36s-1.5050s FX playbook
BOC on the cards this week, and FX is at stake if RBA was anything to go by. Volatility is the name of the game, although the BoC is expected to stay on hold, the devil is in the detail. COVID-19 expected to keep USD underpinned and weigh on commodity-FX, bulls looking for long term game to 1.5050s. Downside target comes in at a 61.8% Fibo, bulls seeking to buy the dip, low 1.36's.
Chart of The Week: Gold meets long-term resistance structure around $1,700
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Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
