USDCAD Consolidates its Gains
The US dollar bounced back as the demand for safe assets continues to rise. Despite the central bank’s interventions to ease the strain in the funding markets, which temporarily drove the greenback lower, the cost to borrow dollars has shot up again.
The dollar bulls are likely to hold on their bets, especially against the oil-sensitive Canadian dollar. Short-term volatility may increase as US unemployment figures are expected to swell this week during the health crisis. The pair is climbing along the 20-day moving average above 1.4000, and the previous high of 1.4550 is the immediate target.
USDCHF Attempts March’s High
In a contest to be the safest haven, the US dollar seems to have gained the upper hand. Switzerland’s government has launched a 42 billion Swiss franc aid package for the economy as the country struggles to contain the pandemic.
While the US is certainly not in an enviable position, the dollar’s reserve currency status has supported its rally. The uptrend is likely to stay as confidence in the US dollar – the most liquid asset is yet to wane. The March high of 0.9900 is the key resistance ahead, a bullish breakout could extend the rally to the parity.
EURGBP Erases Previous Gains
The euro has given up most of its March gains as investors worry about the lack of collective action from the European block so far. Hard times reveal true friends, and disagreement between EU members over a rescue package certainly poked a hole in the so-called union.
Markets fear an unprecedented contraction of the eurozone economy, and this may continue to weigh on the single currency. After piercing through the 30-day moving average, the pair is testing 0.8650. A failure to rebound could send the rate to 0.8400.
AUDJPY Meets Strong Resistance
The Australian dollar has recovered some lost ground against the Japanese yen, supported by a restart of the Chinese economy. There is definitely timid optimism in the air that has helped boost investors’ risk appetite.
The upcoming Reserve Bank of Australia meeting could mirror their latest minutes from last month, in that they would not venture into negative interest rates. A less pessimistic post-pandemic outlook could further sustain the Aussie’s recovery. However, any meaningful rebound will need to break above 67.50. Otherwise, the pair may slip towards the psychological tag of 60.00.