Australian Dollar (AUD) Slips on Gloomy Business Sentiment
The Australian Dollar (AUD) trended lower on Tuesday in response to a sharp fall in Australian business sentiment last month. The National Bank of Australia reported that the business confidence index plummeted from -1 to -4 in February – its worst levels since July 2013 – in response to concerns over the coronavirus.
Looking ahead, AUD investors will be focused on a scheduled speech by Reserve Bank of Australia (RBA) Deputy Guy Debelle this morning and on the lookout for any hints the RBA may be considering further easing.
Pound (GBP) Dented by Brexit Uncertainty
The Pound (GBP) trended lower during yesterday’s session amid concerns regarding Brexit negotiations with the EU. This comes as the UK government said it has no plans to alter its timetable for leaving the EU in spite of the coronavirus crisis threatening to disrupt talks.
Coming up, the Pound will find itself in the spotlight today as UK Chancellor Rishi Sunak delivers his first Budget.
GBP investors will be eager to hear whether the Budget will contain plans for a significant increase in government spending or whether recent events will force the Chancellor to postpone some plans in favour of a ‘coronavirus Budget’.
Euro (EUR) Runs Out of Steam as Italian Government Quarantines Entire Country
After surging at the start of the week, the Euro (EUR) stalled on Tuesday after the Italian government quarantined the entire country in an attempt to stop the spread of the coronavirus.
However, the single currency was prevented from falling back after Germany’s Economy Minister Peter Altmaier said that his government is preparing billions of Euros in fiscal stimulus to help limit the economic impact of the coronavirus.
Meanwhile, the Euro is likely to trend in a narrow range mid-week as markets turn their focus towards the European Central Bank’s (ECB) upcoming policy meeting and what action the bank may take to help cushion the impact of the coronavirus.
US Dollar (USD) Rallies on Tax Relief Hope
The US Dollar (USD) recouped some of Monday’s losses yesterday on hopes Donald Trump’s stimulus measures will help to counteract the economic threat posed by the coronavirus. At the start of the session Trump said he had been meeting with House Republicans to discuss ‘a possible payroll tax cut or relief, substantial relief’.
Looking ahead, the US will publish its consumer price index overnight, but with markets already pricing in another rate cut from the Federal Reserve this month it seems unlikely a robust inflation reading will offer much support to the US Dollar.
Canadian Dollar (CAD) Buoyed by Oil Rally
The Canadian Dollar (CAD) crept higher on Tuesday, with the oil sensitive currency making tentative gains as crude prices rose over 10% amid a broader market rally.
New Zealand Dollar (NZD) Slips in Risk-Off Trade
The New Zealand Dollar (NZD) continued to trend lower on Tuesday as coronavirus fears limited the appeal of risk-sensitive currencies.
March 10th 10:30 AUD Business Confidence (Feb) -2
March 10th 20:00 EUR GDP (Q4) 0.1%