- Gold steadies but set for weekly drop
- U.S. crude gains after White House comments on Saudi-Russia dispute
- Dollar eases but set for best week since 2008 crisis
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Producer Price Index (MoM) (Feb)
- (0200 ET/0700 GMT) Germany Producer Price Index (YoY) (Feb)
- (0400 ET/0900 GMT) EZ Current Account n.s.a (Jan)
- (0400 ET/0900 GMT) EZ Current Account s.a (Jan)
Key Events Ahead
- No Significant Events Scheduled
DXY: The dollar index declined as investors rushed for cash amid the widening economic fallout from the coronavirus outbreak. On Thursday, the United States warned Americans to return home or stay abroad indefinitely, while Senate Republicans unveiled a $1 trillion economic stimulus plan to provide funds directly to businesses and the American public. The greenback against a basket of currencies traded 0.9 percent down at 101.81, having touched a high of 102.99 earlier, its highest since January 2017.
EUR/USD: The euro attempted recovery from a 3-year low hit in the prior session, as the greenback eased against a basket of currencies. On Thursday, the major slumped as demand for dollar funding stayed high despite a fresh round of stimulus from the European Central Bank. The European currency traded 0.6 percent up at 1.0753, having touched a low of 1.0652 earlier, its lowest since April 2017. Investors’ attention will remain on a series of data from the Eurozone economies and EZ current account, ahead of the U.S. existing home sales. Immediate resistance is located at 1.0777, a break above targets 1.0851 (23.6% retracement of 1.1495 and 1.0652). On the downside, support is seen at 1.0603, a break below could drag it below 1.0578.
USD/JPY: The dollar retreated from a near 4-week peak after data released yesterday showed the number of Americans filing for unemployment benefits surged by the most since 2012 to a 2-1/2-year high last week, as companies in the services sectors laid off workers because of the epidemic. Moreover, the selling pressure around the pair intensified after a Reuters poll showed the global economy is already in a recession as the hit to economic activity from the virus has become more widespread. The major was trading 0.8 percent down at 109.82, having hit a high of 111.36 earlier, its highest since Feb. 24. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. existing home sales. Immediate resistance is located at 111.68, a break above targets 112.22. On the downside, support is seen at 108.96 (23.6% retracement of 101.18 and 111.36), a break below could take it near at 108.04 (5-DMA).
GBP/USD: Sterling bounced back from multi-year lows after the Bank of England cut interest rates to 0.1 percent and ramped up its bond-buying programme in a new attempt to shield Britain’s economy from the coronavirus pandemic. The major traded 1.4 percent higher at 1.1654, having hit a low of 1.1409 on Thursday, it’s lowest since 1985. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.1832 (23.6% retracement of 1.3200 and 1.1406), a break above could take it near 1.2093 (38.2% retracement). On the downside, support is seen at 1.1361, a break below targets 1.1311. Against the euro, the pound was trading 0.9 percent up at 92.22 pence, having hit a low of 94.99 on Thursday, it’s lowest since Mar. 2009.
AUD/USD: The Australian dollar surged, halting a 9-day losing streak, as the greenback weakened across the board. On Thursday, the major slumped to multi-year lows as panic selling swept through global assets, leading Reserve Bank of Australia to announce plans to buy enough government debt to keep three-year yields around 0.25 percent. The Aussie trades 2.1 percent up at 0.5864, having hit a low of 0.5506 on Thursday, it’s lowest since Oct. 2002. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.5956 (38.2% retracement of 0.6684 and 0.5506), a break above could take it near 0.6095 (50% retracement). On the downside, support is seen at 0.5616, a break below targets 0.5561.
NZD/USD: The New Zealand dollar staged a solid recovery from 11-year lows, amid growing market concerns over the economic fallout from the coronavirus pandemic. The Kiwi trades 1.7 percent up at 0.5758, having touched a low of 0.5469 on Thursday, its lowest level since March 2009. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.5843 (38.2% retracement 0.6447 and 0.5469), a break above could take it near 0.5958 (50% retracement). On the downside, support is seen at 0.5601, a break below could drag it below 0.5560.
Asian shares nudged higher, while oil posted its biggest bounce on record, amid the widening economic fallout from the coronavirus outbreak.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 3.2 percent.
Australia's S&P/ASX 200 index rose 0.7 percent to 4,816.60 points and South Korea's KOSPI surged 5.3 percent to 1,535.14 points.
Shanghai composite index rose 0.8 percent to 2,722.50 points, while CSI 300 index traded 0.8 percent up at 3,619.01 points
Hong Kong’s Hang Seng traded 2.9 percent higher at 22,351.07 points. Taiwan shares added 6.4 percent to 9,234.09 points.
Crude oil prices surged, extending previous session gains, buoyed by hints from U.S. President Donald Trump he may intervene in the price war between Saudi Arabia and Russia at an appropriate time. International benchmark Brent crude was trading 1.07 percent higher at $29.27 per barrel by 0427 GMT, having hit a low of $24.51 on Wednesday, its lowest since Sept. 2003. U.S. West Texas Intermediate was trading 2.2 percent down at $27.06 a barrel, after falling as low as $20.08 on Wednesday, its lowest since Feb. 2002.
Gold prices rebounded from a near 1-week low but were on track to post its second weekly decline due to a rush for cash amid the widening economic fallout from the coronavirus outbreak. Spot gold rose 0.7 percent to $1,483.52 per ounce by 0434 GMT but was down more than 3 percent for the week. U.S. gold futures fell 0.3 percent to $1,474.20 per ounce.
The yields on U.S. 10-year Treasuries had climbed over 100 basis points in just nine sessions to reach 1.279 percent, before steadying at 1.15 percent.