ForexLive Asia FX news wrap: Traders await US Senate vote on economic relief

Author: Eamonn Sheridan | Category: News

Forex news for Asia trading Monday 23 March 2020 

Weekend:

The Reserve Bank of New Zealand kicked off the week with a QE operation, buying NZ government bonds to lower long end rates. NZD/USD traded lower in the very early hours on the back of the operation.

The US Senate had a 'procedural' vote on the US coronavirus relief bill on Sunday, late afternoon/early evening (US east coast time) that failed to pass. Once US futures opened for the week US equity index futures were slammed lower, hitting limit down (down 5%) within only minutes.

US President Trump held a press conference but had barely anything to say on negotiations of the stimulus package. US equity index futures held their limit down price, only coming back a little once the presser ended.

Meanwhile forex got underway with losses for currencies against the USD. The lift in volatility we have had for FX saw decent ranges for the currency drops. As the US evening progressed there were reports that discussions between US Treasury Secretary Mnuchin and Senate Democrat leader Schumer were continuing, adding hope to markets that a deal could be reached by Monday. Currencies recovered (rthe bounce varied by currency, of course), EUR on of the better recoveries while the yen gained all the way to circa 110.00 for USD/JPY. Regional equites managed to recover somewhat also.

In COVID-19 developments:

  • Japan is to impose a 14 day self-quarantine on all arrivals from the US (on a side note speculation is gaining that the Tokyo Olympics will be postponed to next year).
  • New Zealand raised its alert level and will raise it again within 48 hours to lock down status (only essential services to remain open), which will remain in place for at least 4 weeks.

The data agenda was sparse, what we did get was the first 20 days of March export data for South Korea, which was somewhat encouraging (see bullets above - also check out the coronavirus latest counts from SK, also encouraging). South Korea is expected to announce KRW27 tln of support measures on Tuesday.

Still to come:

Regional equities as I post

  • Nikkei: +1.68%
  • Hang Seng: -3.71%
  • Shanghai: -1.6%
  • ASX: -4.77%

Economic fallout in the UK getting worse - thousands of jobs lost here:

Forex news for Asia trading Monday 23 March 2020 

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