The U.S. Dollar keeps on losing ground against its rivals as the world grapples with coronavirus fears and hopes that the G-7 and others can cooperate to combat the impact.
Overview
No major data today means that we keep watching for developments on the disease front that seems to be taking a turn for the positive. Global markets are doing their best to recover after last week’s performance, which was the worst in a decade. At the moment, the trend is against the buck, helping make our forecast for a weakening greenback become more possible and accurate.
It looks as if governments are ready to step up efforts in coordinating a concerted fiscal and monetary push to ease the negative effects across all assets. With the Fed leading the way on March 18th, it is very likely the central banks will be ready to cut into their interest rates and promote other easing measures. Although the Reserve Bank of Australia decided to give their benchmark rate a 25-basis-point haircut, the Oceanic currency rose as traders expect recovery for the economy as well as the tender.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
EUR
The Euro is on the up-and-up, rising to its best level since mid-January as a result of the tumultuous nature of the coronavirus markets. Christine Lagarde, European Central Bank President, said her officials were ready to help in addressing the global chaos. As regions prepare themselves and look optimistic in the face of the spread scare, Euro has gained momentum with the belief that this may be the beginning of a high-geared push towards growth in the continent.
Clearly, one lesson from the COVID-19 thus far has been a revelation of the lack of preparedness to contain, which will lead to educational and infrastructure being key items of improvement moving forward. Productivity across all other industries shall sky-rocket to make up for lost ground.
MXN
The Mexican Peso is attempting a comeback, following a return to growth in commodity prices. Naturally, the Peso is a wild fluctuating currency that has seen the most volatility as a result of mixed signals economically: positive as trade normalizes with the USMCA pact and negative over violence and the disease contagion. We believe the central bank, Banxico, will continue to focus on cutting interest rates, with plenty of room for it, and as required in the midst of so much damage through barriers in trade and global slowdown.
