Forex news for New York trade on March 19, 2020:
- Bank of England launches new QE program and cuts rates by 15 bps
- BOE Bailey: Time to act was now. Can't wait for data.
- The full statement from the Bank of England emergency action
- Fed establishes dollar swap lines with more central banks
- March Philly Fed -12.7 vs +8.0 expected
- Initial jobless claims 281K vs 220k estimate
- Texas weighs mandatory oil production curtailments
- RBNZ and Riksbank offer new emergency programs
- South Africa central bank cuts rates to 5.25% from 6.25%
- US Senate Republicans weigh maximum payment of $1200
- CNBC Kayla Tausche: US lawmakers are wary of Boeing bailout
- UK coronavirus 3268 vs 2689 yesterday
- Italy death toll overtakes China
- CDC coronavirus numbers for the US show infected up to 10,442
- Stoxx Europe 600 has biggest gain since 2016
- New York coronavirus cases rise to 4,152 from 2,383
- Fed's Barkin: We're working to address market problems as they become apparent
- German coronavirus cases rise to 13,944 from 12,307 yesterday
- Kudlow: We're going to defer interest on student loans until 2021
- Mnuchin: Working to get money to Americans within 3 weeks
Markets:
- Gold down $14 to $1471
- WTI crude up $4.86 to $25.23
- US 10-year yields flat at 1.19%
- S&P 500 up 11 points to 2409
- CAD leads, JPY lags
The unstoppable US dollar bid didn't exactly relent on Thursday but the Fed opened swap lines to 9 more central banks and that relieved the pressure, at least for a time. There were some huge round trips in the antipodeans on the day -- down 5%, then up 2% only to finish down 0.4-0.9% after big rallies into the London fix.
The pound also jumped into the fix in a rip to 1.1794 but it's back down near the 35-year lows at 1.1523. Yesterday's low tick was 1.1452 and that's the spot to watch for another breakdown.
All the talk in the market is about how far everyone is willing to let the dollar run before we see some kind of coordinated intervention. I don't think we're at that point yet but some of the moves -- including the sharp drop in NOK today -- are disorderly so there's a case to move. The US probably isn't liking this move either.
Meanwhile the euro continues to sink lower and it fell 225 pips today to 1.0688, which is the lowest since 2017. The ECB fired another bazooka and it worked in the bond market with periphery yield falling dramatically. Still, the heart of the outbreak is Europe and it doesn't have the capacity to deal with debt like countries that issue their own currency.
The Canadian dollar managed to edge out he US dollar after erasing an early fall. All it took was the largest one-day rally in crude oil in history to do it -- 24%. Aside from that, the loonie has held up relatively well, suggesting that domestic funding pressures aren't as severe as elsewhere -- at least for now.
