FX Update – March 25 – USD Cools


The commodity (AUD again today’s best performer) and many developing world currencies have continued to rebound, while the Dollar, Yen and Swiss franc have traded generally softer. This comes with Asian stock markets rallying and European markets opening positively after the DJIA equity index posted its biggest single-day rally on Wall Street since 1933. The US Senate and White reached agreement on a $2 tln fiscal stimulus package, which joins a growing list of countries around the world to have unveiled bazooka-sized spending packages, joining ambitious central bank monetary stimulus efforts aimed at mitigating the impact of virus containing measures. This comes amid tentative signs that the lockdown in Italy is starting to work, as new cases and the death rate ebb. There are also other signs of encouragement, such as news that 20% of US companies in China have reported that they have returned to normal operations, showing that there is economic life after lockdown.

Among the main currencies, USDJPY has traded neutrally so far today, while most Yen crosses, especially those with a commodity or developing world currency counterpart, have lifted. USDJPY has held with a range of 110.75-111.50, narrow by recent standards and well within the bounds of yesterday’s range. EURJPY has posted modest gains, but remained below yesterday’s peak. AUDJPY, amid its fifth consecutive up day, posted a 10-day high at 67.25. AUDUSD lifted by 1.2% in printing an eight-day high at 0.6060, extending the rebound from last week’s 18-year low of 10%. USDCAD fell to a five-day low at S2 and below 1.4300 at 1.4299, with the Canadian Dollar continuing to correlate closely with oil prices, which today extended over 3% higher to five-day highs, but remains capped at $25.00. EURUSD has traded  higher, to the mid 1.0800s, but has remained comfortably within Tuesday’s range.

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Stuart Cowell

Head Market Analyst

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