Dollar broadly weaker on economic ramifications of coronavirus

Economic shocks of coronavirus continue this week as equities, oil prices, and treasury yields tumble. After failing to meet an agreement with Russia and OPEC on Friday, Saudi Arabia slashed global export oil prices and in turn started a global price war sending WTI prices down 30%. US Treasury yields fell to historic lows and equities continue to fall. Volatility is expected to remain high as markets react to the increasingly serious situation which could impact pricing and liquidity for FX market execution.

Monday Canada Housing Starts,

Tuesday French Industrial Production, Eurozone GDP

Wednesday: U.K. Manufacturing Production, U.K. Trade Balance, U.S. CPI

Thursday: ECB Meeting, U.S. PPI

Friday German CPI, France CPI

  • FX Rates
    March 9, 2020

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    The US dollar lost nearly 1% as  market panic sent 10-year yields to record lows of 0.36%. Markets will continue to remain focused on crude oil prices as well as global equities. Downside pressure remains on the dollar on the back of coronavirus fears and declining US yields, and a probability of another interest rate cut later this month.

    GBP
    Bearish sentiment surrounding the US dollar paired with an absence of negative Brexit headlines sent GBP/USD to the highest level since late January.
    EUR

    The euro surged to 14-month highs near 1.1500 amid the US dollar sell-off. The pair is extending upside for a third session in a row. Investors look ahead to the ECB meeting on Thursday.

    CAD

    Crude oil’s plunge had negative ramifications on the Canadian currency as USD/CAD touched 1.3758 – the highest level since May 2017. Oil staged a technical rebound during European hours and the pair has settled near 1.3650 – a 1.7% change on the day.

    ASIA/PACIFIC

    USD/JPY is printing multi-year lows as investors searched for safety in the Japanese yen amid coronavirus fears and despite Japan’s economy reporting an annualized shrinkage of 7.1% in Q4 2019.

    Chinese exports fell 17.2% in dollar terms for the first two months of 2020 as a result of factory shut-downs. This decrease shows a net-deficit in trade balance.

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Kathryn Garvey
WRITTEN BY
Kathryn Garvey

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