Australian Dollar (AUD) Pummelled by Market Sell-Off
The Australian Dollar (AUD) fell as much as 2% in trade on Monday, as the risk-sensitive currency was shunned by skittish investors in response to the plunge in oil prices and ongoing concerns over the economic impact of the coronavirus. The Australian Dollar was able to claw back much of these losses in overnight trade however as PM Scott Morrison spoke of his government’s possible fiscal response to the disease.
Expect to see the ‘Aussie’ struggle to mount a recovery today, with coronavirus concerns and a suspected fall in domestic business confidence in February both likely to weigh on the currency.
Pound (GBP) Gains amid Global Coronavirus Sell-Off
The Pound (GBP) trended higher against the majority of its peers yesterday, mostly thanks to Sterling being more resistance to coronavirus concerns. With a relatively low number of cases in the UK and the government still in its ‘containment’ phase, it seems GBP investors remain more preoccupied by Brexit, where a lull in developments benefited the Pound.
Looking ahead, we expect Sterling to struggle to find its own momentum today as markets brace for the publication of the UK Budget on Wednesday.
Euro (EUR) Jumps despite Italy Quarantine
The Euro (EUR) proved to be one of the biggest winners amidst the coronavirus driven sell-off on Monday, with demand for the single currency skyrocketing in response to the slump in the US Dollar (USD). This comes in spite of Italy announcing over the weekend that it would quarantine over 16 million people in the north of the country in an effort to contain Europe’s largest outbreak of the coronavirus.
Coming up, today will see the release the latest Eurozone GDP estimate, which is expected to confirm growth in the bloc slowed to just 0.1% at the end of 2019, potentially weighing on the Euro as it highlights how the disruption caused by the coronavirus could tip the Eurozone into a recession.
US Dollar (USD) Retreats as US Yields Plummet
The US Dollar (USD) got off to a poor start this week, with the currency falling in response to tumbling US bond yields. This comes amidst growing expectations for a deep rate cut from the Federal Reserve next week, with markets pricing in a 75% chance of a 1% drop according to CME’s FedWatch tool.
With the fall in US yields showing no signs of slowing and investors growing increasingly concerned about the spread of the coronavirus in the US, its likely we could see the US Dollar extend these losses through today’s session.
Canadian Dollar (CAD) in Freefall Following Collapse in Oil Prices
The Canadian Dollar (CAD) plummeted over 2% on Monday, with the oil-sensitive currency being dumped by investors after crude prices fell as much as 30% at the start of the week as Saudi Arabia launched an oil price war amidst slumping global demand due to the coronavirus.
New Zealand Dollar (NZD) Tumbles in Market Sell-Off
Trade in the New Zealand Dollar (NZD) fell victim to panic selling yesterday, with investors shunning the risk-sensitive currency as investors were unnerved by the plunge in oil prices and stock markets.
March 10th 10:30 AUD Business Confidence (Feb) -2
March 10th 20:00 EUR GDP (Q4) 0.1%