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Forex Today: Yen falls as equities cheer slowing coronavirus deaths, Oil wilts on OPEC+ meeting delay

Dhwani Mehta FXStreet

The risk sentiment was broadly bid in the holiday-thinned quiet Asian session, as the Chinese markets are closed on account of a public holiday. A slowdown in the number of deaths in the world’s hardest-hit countries by the coronavirus pandemic, the US, Italy, Spain and South Korea, offered a sigh of relief to the traders, as the Asian stocks rode higher in tandem with the US equity futures.

Meanwhile, the safe-havens such as the yen and US bonds got thrashed by the improved market mood. The US dollar also backed off from an eight-day high, although remained supported, as US President Trump said that he hopes to see leveling off of coronavirus in the hottest spots.

On the fx front, USD/JPY spiked briefly above 109.00 before consolidating just below the latter, as the yen also faced some selling pressure on reports that Japan will declare a state of emergency on Tuesday, effective April 8 (Wednesday), as the virus spread intensifies in Tokyo. The Aussie jumped to test 0.6050 while the Kiwi also bounced-back towards 0.5900 amid risk-on and upbeat remarks from the Reserve Bank of New Zealand (RBNZ) officials.

Among the European currencies, EUR/USD attempted a tepid bounce above 1.0800 while the pound dropped against the greenback following the news that the UK PM Boris Johnson was admitted to hospital for some virus-related tests.

Oil prices opened with a 10% bearish gap amid oversupply fears, as the OPEC+ meeting was pushed back until April 9 amid Saudi-Russia tussle. Meanwhile, gold prices were pressured below 1650 levels.

Main topics in Asia

Saudi Arabia delays issuance of May crude prices until after OPEC+ meeting – Reuters

UK PM hospitalised for COVID-19 tests as a precaution

Johns Hopkins data reports US COVID-19 cases reach 1 In 1,000 infected

RBNZ’s Orr: Economic shockwaves eventually give way to vibrant economy – StuffNZ

WTI downed 10% at Asia open as OPEC+ meeting pushed backed

Trump: Hopes we're seeing levelling off of coronavirus in the hottest spots

Japan’s LDP Chief Kishida: Govt close to finalising the economic relief package

US Pres. Trump: If oil price stays the way it is he would do very substantial tariffs

RBNZ Chief Economist: Not preparing banks for negative OCR at the moment

China reports 39 additional coronavirus cases April 5th

UAE OilMin al-Mazrouei backs Saudi call for oil talks, WTI bounces

UK consumer confidence records its biggest fall since 1974 – GfK survey

Spain and EU commissioners call for common European debt instruments - FAZ

Japan state of emergency to take effect on April 8 – Kyodo

Japan’s economic stimulus package to be rolled out in two phases – Bloomberg

Italy plans to begin reversing coronavirus-led confinement measures from mid-May

Key focus ahead

Today’s EUR macro calendar is at thin-showing, in absence of first-tier economic news. The immediate focus will be on Germany’s Factory Orders data for February, due at 0600 GMT. At 0830 GMT, the UK March Construction PMI and Eurozone April Sentix Investor Confidence data will be closely watch.

In the NA session, the Bank of Canada (BOC) Business Outlook Survey will hog the limelight amid lack of any data releases from the US and Canada.

Besides, the market sentiment will remain at the mercy of the virus-related updates and US dollar dynamics. Meanwhile, oil traders will look forward to fresh OPEC headlines and President Trump’s tariffs decision on Saudi and Russian oil production.

When are the German Factory Orders and how could they affect EUR/USD?

EUR/USD manages to hold the 1.08 handle ahead of the German Factory Orders, having dipped briefly to 1.0773 last Friday amid broad-based US dollar strength. German factory orders are seen falling by 1.9% MoM in February, having bounced by 5.5% in January.

GBP/USD eyes first death cross since May 2019

GBP/USD's long-term indicator is about to turn bearish for the first time in 11 months. The pound was offered in Asia as Prime Minister Johnson was admitted to hospital on for coronavirus-related tests.

RBA preview: On hold, statement to be balanced, marginal risks for AUD

RBA unlikely to announce further policy changes at Tuesday's meeting. Statement is likely to be balanced with the Bank arguing that the economy will eventually recover.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD softens to near 0.7000 on hawkish Fed signals, RBA rate decision looms

The AUD/USD pair loses momentum to near 0.7010 during the early Asian session on Monday. The US Dollar strengthens against the Australian Dollar on rising US Treasury yields and growing bets on further Federal Reserve interest rate hikes. The Reserve Bank of Australia will be in the spotlight later on Tuesday.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold treads water below $4,300

Gold grabs some buying attention and advances marginally at the end of the week, partially retracing the weekly decline, although it is still navigating below the key $4,300 mark per troy ounce. The fresh selling bias on the Greenback and the modest decline in US Treasury yields appear to support the humble advance in the precious metal.

Week ahead: Rate hike bets face a crucial data week

Despite the solid drop from the mid-September high, oil prices remained in the driver’s seat for another week, setting the tone in financial markets. Six months have passed since the late-February start of the US-Iran conflict, and there is still no breakthrough in the stalled talks, despite pressure from regional leaders and the rest of the world.

After the Trump Xi summit, markets are trading three clocks

The summit delivered time, not a deal. Trade, oil and chips now each run to a date, and the macro backdrop matters more than the pageantry. Markets wanted a deal and got a calendar date instead. Xi Jinping left Washington on Friday after tea at the White House and a tour of the National Archives.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.