|

Forex Today: Fears about Kim Jong-un's health, oil's historic negative price, coronavirus carnage weigh

Here is what you need to know on Tuesday, April 21:

Markets are back to a risk-off mood amid that is keeping the US dollar, Japanese yen, and gold in the lead. Concerns about North Korea, oil, and coronavirus are weighing on the mood. 

North Korea: Reports about leader Kim Jong-un is reportedly in a critical situation following heart surgery raises concerns about succession in the nuclear rogue nation.

Paying to sell oil: Contracts of WTI oil for May tumbled down to negative territory for the first time, reaching -$40, a drop of over 300%. Contracts for June have begun representing WTI as a whole and are above $21. Apart from technical issues with rolling over from May to June and oddities related to the USO Exchange Traded Fund (ETF), oil has tumbled due to oversupply.

Lack of demand due to coronavirus lockdowns caused storage in Cushing and other places to fill and various physical prices in the US turned negative. Russia and Saudi Arabia have been mulling bringing forward production cuts from early May to now. 

US: President Donald Trump announced he would suspend incoming immigration, without offering details. New York State reported ongoing improvement – the sixth day in a row. House Speaker Nancy Pelosi said that a new economic relief deal is coming down to the fine print. A broad agreement could boost sentiment. US Existing Home Sales for March may show a significant drop.

See Existing Home Sales: Unemployment strikes the housing market

Europe: Encouraging drops in coronavirus cases and deaths have been reported in Spain, Italy, and France, yet all three countries have over 20,000 mortalities from the disease. The figures may be skewed by the weekend effect and Tuesday's statistics may see a jump.

Ahead of the EU leaders conference on Thursday, Spain suggested creating an aid package worth €1.5 trillion and received support from several European officials. The Bank of Spain forecasts a plunge of 12% in the economy this year. A north-south gap around coronabonds is weighing on the euro. The German ZEW Economic Sentiment will likely move the common currency:

See German ZEW Preview: Less bad doesn’t mean good, no chances for EUR

UK: Parliament is back and will scrutinize the government's handling of COVID-19. Despite a drop in cases reported on Monday, Prime Minister Boris Johnson is reportedly reluctant to ease the lockdown, which is set to remain in place at least until early May. UK jobless claims are set to leap tenfold. Around a million employers have asked to participate in the government's furlough scheme and around 80% have been approved. 

Antipodeans: The New Zealand dollar has been on the back foot after Adrian Orr, Governor of the Reserve Bank of New Zealand said he is open-minded on directly monetizing the government's debt. Phillip Lower, Governor of the Reserve Bank of Australia, stressed that Quantitative Easing should not be confused with financing the government. The Aussie is down as well despite the RBA's minutes stating that QE will likely smaller and less frequent. 

COVID-19 cases are nearing 2.5 million and over 170,000 deaths have been confirmed. The US infections are nearing 800000, followed by Spain at just over 200,000, then Italy, France, Germany and the UK. The US reported over 42,000 losses of life, followed by Italy at over 24,000.

Cryptocurrencies have been edging higher after losing ground earlier, with Bitcoin trading around $6,900.

More Coronavirus: What forex traders should look for and the one thing to avoid – Interview with Navin Prithyani

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.

More from Yohay Elam
Share:

Editor's Picks

GBP/USD holds gains above 1.3150, US PCE inflation data looms

The GBP/USD pair recovers some lost ground to near 1.3175 during the Asian trading hours on Thursday. However, the potential upside for the major pair might be limited amid UK political instability and rising expectations of US interest rate hikes this year. Traders await the US May Personal Consumption Expenditures inflation data on Thursday for fresh impetus. 

EUR/USD softens to near 1.1350 as Fed hike bets rise ahead of PCE inflation data

The EUR/USD pair declines to around 1.1355 during the early Asian trading hours on Thursday. The Euro weakens to its lowest level since June 2025 against the US Dollar as traders increase their bets on US interest rate hikes later this year. The US May Personal Consumption Expenditures inflation data will be the highlight on Thursday. 

Gold: Impending Death Cross hints at more downside

Gold is heading back toward seven-month lows near $3,950 early Thursday. The US Dollar enters bullish consolidation amid Fed rate hike bets, conflicting US-Iran messages. Gold could see further declines as RSI flirts with oversold territory, eyes on impending Death Cross.

Bitcoin tests $60,000 as whales sell off – Aave and Jupiter show resilience

The broader cryptocurrency market remains under intense selling pressure, with Bitcoin back at $60,000 for the third time this year. On-chain data shows selling pressure from large-wallet investors, commonly referred to as whales, while total liquidations hit nearly $1 billion in 24 hours.

5.90% to 5.45%: Why the Pound ignored the bond market’s relief rally
Keir Starmer resigned on Monday, and the Pound barely moved. That near-silence is the tell. Sterling's real driver these past four months has not been the prime minister, nor the left-leaning frontrunner lining up to replace him, but the long end of the gilt curve, which answers to a force no British politician controls.
Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.