Dollar and equities higher despite poor US economic data

The dollar and equities edged higher despite poor economic data released this morning. US Initial Jobless Claims were 5.245 million last week, the total job loss for the last four weeks is 22 million, and March’s Housing Starts fell 22.3%, the most since 1984. UST 10-year yields dropped 2bps to 0.61% and oil remains near $20 a barrel. Gold remains firm near $1,720 per oz.

“When the whole world is silent, even one voice becomes powerful.”
Malala Yousafzai
  • FX Rates
    April 16, 2020

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  • USD

    The dollar edged higher even after a slew of poor US economic data was released this morning. Bloomberg News said that Initial Jobless Claims of 5.245 million means that 10 years of job creation has been wiped out in month. President Trump said he will announce later today guidelines for easing stay-at-home requirements in an attempt to reopen the economy.

    GBP

    The UK is expected to extend its lockdown, even as health officials see signs that the worst may be over. The UK pound bounced several times between $1.2460 and $1.2515, and now sits near yesterday’s close.

    EUR

    German Chancellor Angela Merkel said that Germany will begin reopening its economy next week after a month in limited lockdown, although she warned that a return to normal life shouldn’t be expected until a vaccine is developed. The euro is trading near yesterday’s close just under $1.09.

    CAD

    Canadian factory sales rose in February, its first rise in five months. The USD/CAD has been range-trading between C$1.4100 and C$1.4125, but quickly dropped below C$1.4100, where it currently trades. Oil prices are holding near $20 a barrel. Traders are digesting the Bank of Canada’s announcement yesterday that they will be implementing new emergency measures, including purchasing provincial bonds and corporate debt. A ‘flash’ estimate published by Statistics Canada yesterday was that Canada’s economy contracted by 9 percent in March.

    ASIA/PACIFIC

    The USD/CNY moved little overnight, even as most emerging market currencies weakened. Global investors have been wary of emerging market assets as the economic damage on commodities and global trade from Covid-19 remains uncertain.

    The USD/JPY currency pair saw a big move higher early in the day, peaking just above 108, only to sell-off in a risk-off/safe-haven move to 107.50, near where it currently trades.

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