USD Still Supported
The US dollar pushed higher at the European open on Tuesday though has since seen some selling kicking in to take the index back down to 99.11 last. USD remains broadly supported on the back of recent data strength. Traders await the FOMC meeting minutes this week ahead of manufacturing data on Friday, which is likely to be the more market-moving of the two releases.
EUR Looks Weak
EURUSD continues to languish at the bottom of the recent sell-off. Price has been on a steady downward trajectory over recent weeks as concerns around the coronavirus impact, Brexit trade uncertainty and dovish comments from the ECB have all combined to weigh on sentiment. EURUSD trades 1.0827 last.
GBP Holds Around 1.33
GBPUSD made an initial move lower on the session, weighed on by the rally in USD. However, with the dollar having retraced some, GBPUSD has been able to recover. UK CPI tomorrow will be the first key UK data releases of the week. Figures are expected to rise to 1.7% from 1.3% previously. Such a reading should help keep GBPUSD supported, trading 1.30 last.
SPX500 Reverses Sharply
Risk assets have taken a tumble lower on Tuesday as the first signs of the economic impact of coronavirus have started to emerge. HSBC announced that it will be cutting 35,000 jobs worldwide as profits fall 56%. Meanwhile, tech giant Apple has reported that it will miss first-quarter earnings this year due to the loss of activity in China. The SPX500 has broken down to 3364.13 from recent 3392.33 highs as fears grow over the full scale of the negative impact from the coronavirus outbreak.
JPY & Gold Rally
Safe havens have been higher today as fears over the economic impact from coronavirus fuel a surge in safe-haven buying. This has lead both JPY and gold higher against USD. XAUUSD trades 1588.53 last, breaking out to new highs overnight. USDJPY trades 109.73 last, holding just above 109.60 support for now.
Oil prices have been knocked heavily lower overnight. As a wave of risk aversion sweeps across asset markets, oil prices have tumbled from recent highs above 52.50 to trade 51.50 last. The decline will be frustrating for crude bulls and could extend further if this week’s EIA crude inventories report (due to be released on Thursday due to US holiday) shows a further inventories build.
USDCAD has posted a firm recovery over the last 24 hours as the collapse in crude prices, and risk appetite, has seen CAD come under heavy selling pressure. USDCAD has traded back up to 1.3266 last, moving back into the top half of the 1.32 – 1.33 range.
Aussie Falls on Amidst Risk-Off Trading
AUDUSD has dropped firmly lower overnight also as the risk averse tone to today’s trading weighs on the Aussie. Price has now broken down below the .6682 level support and is heading back down towards the year’s lows, trading .6674 last. Wage price data due over tonight’s Asian session will be the key domestic data focus.