US Dollar Lacking Momentum
The US dollar has had a slow start to the day on Wednesday as the drift lower from recent highs continues. The USD index trades 98.62 last. It’s been a slow week for data, though key retail sales and inflation data are due tomorrow and Friday. Looking ahead to today, comments from Fed’s Powell will be the main domestic focus.
EUR Outlook Still Bearish
EURUSD is posting a minor recovery today, benefiting from the drift lower in USD. However, the outlook remains tilted towards the downside for the EUR. The Irish election results this week have added further downside pressure for EUR. The currency was already under strain over recent weeks as a result of the coronavirus outbreak and concerns over EU/UK trade talks. EURUSD trades 1.0917 last.
GBP Boosted By BOE Comments
GBPUSD has been higher again today, extending the rally seen across the week so far. Recent data upside has helped lift sentiment which was further boosted yesterday. BOE Governor Carney told the Economic Affairs Committee in the UK that the financial impact from coronavirus looks manageable. GBPUSD trades 1.2978 last.
Risk Assets Trade Higher
Risk assets have been in better shape again today with the SPX500 rallying back above the 3358.86 level to trade 3369.43 last. The market continues to shrug off the risks from the coronavirus to remain near recent highs. Despite the continued spread of the virus the death toll so far looks to be mainly contained to China which is limiting some of the damage to risk appetite for now.
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JPY & Gold Lower
Safe havens have been lower today with both JPY and gold lower in light of the better tone to risk sentiment. XAUUSD trades 1565.16 last, with price continuing to hold above the 1555.38 level for now. USDJPY trades 109.99 last, with price settling back having earlier popped above the recent 100 highs to trade fresh highs on the month.
Crude Recovery Continues
Oil prices have been a little higher today, supported by a better tone to risk appetite. Yesterday, the API reported a 6 million barrel increase in US oil inventories. However, the market seems to be ignoring the data, waiting instead for the headline EIA report due later today. Crude trades 50.94 last.
Loonie Lower Again
USDCAD continues to pull away lower beneath the 1.33 level. The recovery rally in crude, as well as some softening in the US dollar, is weighing on price here. 1.3207 support is the level to watch. Looking ahead to tomorrow, BOC Governor Poloz will be making comments which could cause some price impact for CAD.
AUDUSD is trading on a better footing today with price rallying up to .6742 last as the general improvement in risk appetite keeps Aussie supported. While equities and commodities prices continue to trade higher, AUD looks set to enjoy further upside, putting focus on a move back to the bearish trend line next.