The pendulum swung again late yesterday and overnight as global equities fell and the greenback regained some of its losses from the day prior.
Overview
However, the dollar has paired those gains early today as American equities have moved back into the green. The result is a dollar that is only modestly stronger.
Domestic risk sentiment may be higher due to reporting that the Trump administration is developing a plan to get the American economy open in the next four to eight weeks. The idea is to start with smaller cities and towns that were not yet hit hard by Covid-19. Traders are taking this plan with a grain of salt because it was just last month the Administration said the economy would be open by Easter, which is in four days.
The minutes of the latest Federal Reserve meeting will be published at 2 p.m. today, but like with recent fundamental data, the statement will likely be viewed as stale. Therefore, it is unlikely to move markets.
What to Watch Today…
- Fed meeting minutes at 2 p.m.
Complete Economic Calendar can be found here.
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EUR
The Euro swung between gains and losses overnight but the rate will look familiar to yesterday morning’s ranges. European finance ministers concluded a 17-hour teleconference yesterday but failed to agree on a 500 billion euro aid package to deal with the fallout of Covid-19. Talks are scheduled to restart tomorrow and there is some optimism that a deal can be done by Easter Sunday.
The economic docket showed indications of exactly how bad the European economy may end up. The French economy shrank by the most since World War II in the first quarter of the year. The French central bank estimates the slump was 6%, with the biggest slowdowns in automotive and machine-making sectors. The central bank said factories are running at just 56% capacity in March, down from 78% in February.
AUD
Antipodean currencies ebbed and flowed between gains and losses last night. The Australian dollar initially fell after S&P Global Ratings cut the country’s credit rating to negative from stable. The New Zealand dollar also came under pressure as the Reserve Bank of New Zealand is expected to increase the scope of its asset-purchasing program. However, both currencies were able to rebound as the global risk environment as improved over the last few hours.
