FX Update – March 18 – King Dollar

<p>The <strong>Dollar</strong> has remained firm amid nervous global markets, with demand for cash dollars remaining high while some traditional safe haven assets, such as gold and US Treasuries, have nonetheless remained under pressure as investors rebalance portfolios and build cash cushions to cover margin calls. US bonds have been falling despite the Fed buying up to $40 bln worth daily in its revamped QE program. Some market narratives are also pointing to concerns about the US fiscal position light of the US government’s announcement for a $1.2 tln stimulus package. <strong>Gold</strong> prices are down 1.5%, though remain off the three-and-a-half-month low seen on Monday. Stock markets turned lower during the Asian session and opened in Europe down some 3-4%.</p>
<p><a href="https://analysis.hotforex.com/wp-content/uploads/2020/03/2020-03-18_11-31-37.jpg"><img class="size-medium wp-image-116474 alignleft" src="https://analysis.hotforex.com/wp-content/uploads/2020/03/2020-03-18_11-31-37-300×257.jpg" alt="" width="300" height="257" srcset="/wp-content/uploads/2020/03/2020-03-18_11-31-37-300×257.jpg 300w, /wp-content/uploads/2020/03/2020-03-18_11-31-37-490×420.jpg 490w, /wp-content/uploads/2020/03/2020-03-18_11-31-37.jpg 617w" sizes="(max-width: 300px) 100vw, 300px" /></a><a href="https://analysis.hotforex.com/wp-content/uploads/2020/03/2020-03-18_11-33-22.jpg"><img class="alignnone size-medium wp-image-116484" src="https://analysis.hotforex.com/wp-content/uploads/2020/03/2020-03-18_11-33-22-300×259.jpg" alt="" width="300" height="259" srcset="/wp-content/uploads/2020/03/2020-03-18_11-33-22-300×259.jpg 300w, /wp-content/uploads/2020/03/2020-03-18_11-33-22-534×462.jpg 534w, /wp-content/uploads/2020/03/2020-03-18_11-33-22-486×420.jpg 486w, /wp-content/uploads/2020/03/2020-03-18_11-33-22.jpg 610w" sizes="(max-width: 300px) 100vw, 300px" /></a></p>
<p>In currencies, movements have been relatively contained so far today. The <strong>Yen</strong> has outperformed, though concurrent Dollar strength has seen <strong>USDJPY</strong> lift back above 107.00 from a 106.76 low. The commodity and most developing world currencies remained under pressure. <strong>AUDJPY</strong> declined by over 1%, and has breached the 11-year low seen yesterday, trading at S1 – 63.80. <strong>AUDUSD</strong> remained heavy, also breaching the 17-year low seen yesterday at 0.5960, it trades at 0.5936. <strong>NZDUSD</strong> printed a fresh 11-year low at 0.5911. <strong>USDCAD</strong>, amid its biggest monthly gain since January 2015, remained buoyant but still held below the four-year high seen yesterday at 1.4276.</p>
<p><a href="https://analysis.hotforex.com/wp-content/uploads/2020/03/2020-03-18_11-35-19.jpg"><img class="alignnone size-medium wp-image-116494" src="https://analysis.hotforex.com/wp-content/uploads/2020/03/2020-03-18_11-35-19-300×261.jpg" alt="" width="300" height="261" srcset="/wp-content/uploads/2020/03/2020-03-18_11-35-19-300×261.jpg 300w, /wp-content/uploads/2020/03/2020-03-18_11-35-19-534×462.jpg 534w, /wp-content/uploads/2020/03/2020-03-18_11-35-19-482×420.jpg 482w, /wp-content/uploads/2020/03/2020-03-18_11-35-19.jpg 606w" sizes="(max-width: 300px) 100vw, 300px" /></a><a href="https://analysis.hotforex.com/wp-content/uploads/2020/03/2020-03-18_11-41-31.jpg"><img class="alignnone wp-image-116514" src="https://analysis.hotforex.com/wp-content/uploads/2020/03/2020-03-18_11-41-31-300×271.jpg" alt="" width="293" height="265" srcset="/wp-content/uploads/2020/03/2020-03-18_11-41-31-300×271.jpg 300w, /wp-content/uploads/2020/03/2020-03-18_11-41-31-464×420.jpg 464w, /wp-content/uploads/2020/03/2020-03-18_11-41-31.jpg 534w" sizes="(max-width: 293px) 100vw, 293px" /></a></p>
<p><strong>USOil</strong> prices hit a new major-trend low at <strong>$25.50</strong>, which is the lowest nominal level traded since May 2003. <strong>EURUSD</strong> ebbed back under <strong>1.1000</strong>, but has so far remained shy of the three-week low seen yesterday at 1.0956. Regarding the coronavirus, there are concerns that the massive global fiscal and monetary stimulus measures, even when targeted well, will simply not be able to fully mitigate the impact of draconian lockdowns in an increasing number of economies.</p>
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<p><strong>Stuart Cowell</strong></p>
<p><strong>Head Market Analyst</strong></p>
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