The risk-off sentiment extended into Thursday amid increasing concerns over the coronavirus induced global economic gloom and doom. Broad-based US dollar strength dominated once again, as investors ran for cover and sold-off global stocks alongside equity futures.
The slump in the US Retail Sales and Industrial Production reinforced the virus-led global recession fears while the bleak economic growth outlook for Asia by the International Monetary Fund (IMF) further roiled the market mood. Additionally, investors remained wary following the latest US report that China conducted low-level nuclear tests.
Despite risk-aversion, gold prices failed to benefit and held the lower ground around 1715 levels while oil prices rebounded on hopes that the rising US crude stocks would push the producers to deepen the output cuts.
Within the G10 currency markets, the Antipodeans were the biggest causalities of the broad dollar strength, with AUD/USD downed to five-day lows below 0.6300 while the Kiwi breached the 0.5950 support. Australian dollar ignored the upbeat employment data, as it was for the pre-lockdown period. Meanwhile, the Canadian dollar reported small losses despite the bounce in oil prices, with USD/CAD bid well above 1.4100.
USD/JPY rallied 0.50% and briefly regained the 108 level, as Treasury yields also traded in the green. EUR/USD slipped further below 1.0900 while the cable extended the downside towards 1.2450.
Main topics in Asia
USD/MXN Price Analysis: Mexican peso drops as Fitch downgrades Mexico to BBB-
US Pres. Trump: Data suggests that the nation has passed the peak on new coronavirus cases
IMF's Georgieva: Executive board approves creation of short-term liquidity line…
G-20 okays debt standstill for the world’s poorest nations
Reuters Tankan survey: Japanese business confidence drops to fresh decade lows
RBNZ Orr: We entered the crisis with banks in a strong position
IMF: Asia's economic growth this year will grind to a halt for the first time in 60 years
NZ PM Ardern: Will make the lockdown decision on Monday, April 20
Aussie jobs data better than expected, but the caveat is ...
Japanese firms say govt’s $1 trln coronavirus stimulus insufficient, too late – Reuters poll
Coronavirus update: China’s local infections rise while imported cases drop
US State Department: China may have conducted low-level nuclear test blasts
South Korea proposes $6.2 bln extra budget to fight coronavirus, KRW keeps lows
Japan PM Abe reportedly secured funds for JPY100,000 cash payouts to all citizens - Kyodo
Key focus ahead
Thursday’s EUR macro calendar lacks first-tier economic releases, therefore, traders will take some incentives from the German Final Consumer Price Index (CPI) and Wholesale Price Index (WPI) data due on the cards at 0600 GMT. Later in the European hours, the Bank of England (BOE) Credit Conditions Survey for the first quarter will be released, followed by the Eurozone February Industrial Production at 0900 GMT.
In contrast, a flurry of relevant US macro data will be released at 1230 GMT, including the Initial Jobless Claims, Housing Starts, Building Permits and Philly Fed Manufacturing Survey for April. Parallelly, the Canadian Manufacturing Sales data will also drop in.
Apart from the data, the speeches by the Bank of England (BOE) policymakers Tenreyro and US Federal Reserve (Fed) official Williams will remain in focus amid incoming coronavirus-related updates and earnings reports.
Meanwhile, US President Donald Trump is likely to announce new guidelines for reopening the economy on Thursday. The UK government will review social distancing measures.
EUR/USD back below 200-hour MA ahead of Eurozone's Industrial Production
EUR/USD faded an overnight spike above the 200-hour MA in Asia. Risk-off continues to bode well for the US dollar, a global reserve currency. Eurozone's Industrial Production is forecasted to have contracted by 0.2% in February.
GBP/USD extends losses below 1.2500 as risk-off favors US dollar
GBP/USD registers two-day declines amid broad US dollar strength. Coronavirus crisis keeps risk-aversion in play, Brexit talks to resume from next week. US data, UK’s review of social distancing measures in focus.
US Jobless Claims Preview: Facts that retain the ability to move markets
Initial unemployment claims expected to be 5.1 million. Four week total would be over 21 million, 13% of the workforce. Continuing claims projected to almost double to 14 million.
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.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.