Risk-off sentiment drives dollar higher, equities lower
A more cautious approach to markets is driving the US dollar higher, equity markets and bond yields lower. Oil prices dropped below $20 a barrel. President Trump is penalizing the World Health Organization (WHO) by withholding funding. Just released US March Retail Sales fell by a record 8.7% MoM.
April 15, 2020
EUR/USD 1.0875 GBP/USD 1.2465 USD/CAD 1.4076 AUD/USD 0.6296 USD/JPY 107.73 USD/CNH 7.0748 USD/ILS 3.6087 USD/MXN 24.0254 USD/CHF 0.9687 USD/INR 76.4550
The dollar is up across the board, reversing a week-long sell-off. A risk-off mood in financial markets has fueled demand for the dollar, its biggest losers were the Australian and New Zealand dollars, down 1.9% and 1.7% respectively. US equities are poised to open down over 2%. US Treasury 10-Year yields are lower by 10 basis points to 0.66% following dismal US Retail Sales and US Empire Manufacturing data released at 8:30am this morning.GBP
In relatively quiet trading and against a broadly stronger US dollar, the UK pound dropped over 1%, and now trades back below $1.25.EURGermany plans to extend its lockdown despite new COVID-19 cases dropping for the sixth straight day. Italy reported the fewest new cases in a month. The euro fell about 0.65% and to the lower end of its recent $1.09-$1.10 range.CAD
Oil prices fell to 18-year lows after dismal forecasts for global oil demand by the International Energy Agency. The Canadian dollar weakened overnight by 1.25% with the USD/CAD now trading over C$1.40 again. Traders await the Bank of Canada decision at 10am, no rate change is expected.ASIA/PACIFIC
The Chinese yuan moved little overnight. A screenshot of China’s sovereign digital currency appeared online, providing a rare peak into the advance of Beijing’s digital yuan. There is no official schedule for its launch.
Even the Japanese yen couldn’t overcome the broadly stronger dollar. The USD/JPY moved slightly higher, but remains well within its week-long downtrend.
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