After trading on the back foot to start the week, the dollar’s fortunes have improved this morning as global risk sentiment turned strongly negative.
Overview
American futures show equities will open 2% lower following the S&P’s rise to its one-month high yesterday.
Earnings season continues today with Goldman Sachs, Citigroup and Bank of America reporting large losses before the bell, which was expected. The biggest piece of data was U.S. retail sales which showed the steepest decline in history. All sales fell 8.7%, worse than the dire expectations of an 8.0% contraction. The Empire State manufacturing print more than doubled its previous record low. Manufacturing in New York fell to -78.2 with an expectation of -32.5. Industrial and manufacturing data for March will cross the wire at 9:15 a.m.
What to Watch Today…
- Bank of Canada at 10 a.m.
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EUR
The Euro erased its gains from earlier this week and slipped nearly a full percent against the greenback overnight from last night’s close. Europe seems to be ahead of the U.S. in terms of the coronavirus and many countries are drafting measures to open economies, which may give the Euro a boost in the coming months. In the meantime, EUR/USD will continue to rise and fall with global risk appetite.
CAD
Commodity-based currencies, namely the Canadian dollar and Norwegian krone, tumbled overnight as the price of crude oil traded under $20 a barrel, the lowest level since 2002. The International Energy Agency said that global oil demand will fall by 9% this year due to lockdowns and warned that storage could be exhausted by mid-year even after OPEC+ announced production cutbacks.
The Bank of Canada’s decision is due out at 10 a.m., with most expecting the central bank to add to its monetary stimulus.
