Dollar Loses Ground On Weak Data, Massive Fiscal Stimulus

Trading 28 mar 2020 Commentaire »

The U.S. dollar saw a weak session on Friday, extending recent slide, weighed down by recent weak economic data and the government's massive fiscal stimulus worth $2 trillion.

President Donald Trump signed the stimulus bill designed to respond to the economic fallout from the coronavirus pandemic after the House voted to approve it this afternoon.

The vote from the House happened after the package was unanimously approved the Senate late Wednesday.

The massive bill includes $250 billion in direct payments to individuals and families, $350 billion in small business loans, $250 billion in unemployment insurance benefits and $500 billion in loans for distressed companies.

The legislation will purportedly provide direct payments of $1,200 to individuals making up to $75,000 a year, $2,400 to couples making up to $150,000 and an additional $500 per child.

The bill also reportedly includes $130 billion in funding for hospitals as well as $150 billion for state and local governments.

The dollar index dropped to 98.27, giving up nearly 1.1% from previous close.

Against the Euro, the dollar weakened to $1.1136, giving up nearly 1%.

The pound sterling was stronger by more than 2% at $1.2459.

The Yen strengthened to 107.93 a dollar, from 109.68 a dollar Thursday evening.

Against the Aussie, the was lower by about 1.7% with the AUD-USD pair trading at 0.6165.

Against Swiss franc, the dollar was down more than 1% at 0.9517. Against the loonie, it was down slightly at 1.4007.

The Canadian central bank today reduced its benchmark rate unexpectedly to cushion the economic shocks from the COVID-19 pandemic.

The BoC lowered its target for the overnight rate by 50 basis points to 0.25%.

The Governing Council is willing to take further action as required to support the Canadian economy and financial system and to keep inflation on target, the bank said.

revised data from the University of Michigan showed consumer sentiment in the U.S. deteriorated by much more than initially estimated in the month of March.

The report said the consumer sentiment index for March was downwardly revised to 89.1 from the preliminary reading of 95.9.

The consumer sentiment index is now down sharply from the final February reading of 101.0, reflecting the fourth largest one-month decline in nearly a half-century.

The Commerce Department's report showed personal income climbed by 0.6% in February, matching the increase seen in January. Economists had expected income to rise by 0.4%.

Meanwhile, personal spending edged up by 0.2% for the second straight month, matching expectations.

According to a report released by the Labor Department on Thursday, initial jobless claims skyrocketed to 3,283,000 in the week ended March 21, an increase of 3,001,000 from the previous week's revised level of 282,000.

Economists had expected jobless claims to spike to about 1.5 million from the 281,000 originally reported for the previous week.


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Treasuries See Further Upside Amid Lingering Coronavirus Concerns

Trading 28 mar 2020 Commentaire »

Following the advance seen in the previous session, treasuries saw some further upside during the trading day on Friday.

Bond prices moved higher early in the session and remained firmly positive throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 6.2 basis points to 0.749 percent.

The early weakness among treasuries came amid lingering concerns about the economic impact of the coronavirus, as the number of confirmed cases in the U.S. surpassed the number of cases in China or Italy.

According to data from Johns Hopkins University, there have been more than 94,000 confirmed coronavirus cases in the U.S. and nearly 1,500 deaths.

A report from the University of Michigan showing consumer sentiment deteriorated by much more than initially estimated in the month of March may also have increased the appeal of safe havens such as treasuries.

The report said the consumer sentiment index for March was downwardly revised to 89.1 from the preliminary reading of 95.9.

The consumer sentiment index is now down sharply from the final February reading of 101.0, reflecting the fourth largest one-month decline in nearly a half-century.

Meanwhile, bond traders largely shrugged off House passage of the massive $2 trillion stimulus bill designed to respond to the economic fallout from the coronavirus pandemic.

Republican Congressman Thomas Massie of Kentucky injected some last-minute drama, but the relief package was eventually approved by voice vote, as expected.

Next week, the Labor Department's monthly jobs report is likely to attract attention, although a lot other developments may also catch traders' eyes before the release of the data next Friday.


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Oil Futures Settle Sharply Lower, Post 5th Straight Weekly Loss

Trading 28 mar 2020 Commentaire »

Crude oil prices drifted lower on Friday, losing for a second successive day, as worries about energy demand outlook outweighed massive stimulus announced by central banks and governments to limit the economic impact of the coronavirus spread.

Oil's slide was somewhat limited by a report from Baker Hughes that said active oil rigs count in the U.S. saw a significant drop this week.

West Texas Intermediate Crude oil futures for May ended down $1.09, or about 4.8%, at $21.51 a barrel, after touching a low of $20.88 in the session.

Brent crude futures were last seen trading at $25.10, down $1.26, or about 4.75%.

On Thursday, WTI crude oil futures ended lower by 7.7%, at $22.60 a barrel, after having added about 8% in the previous three sessions.

Oil prices dropped by about 5% in the week, going down for a fifth straight week.

In its latest report, the International Energy Agency has warned that global demand for crude oil will likely fall by as much as 20 million barrels per day.

Meanwhile, data released by Baker Hughes said the number of active oil rigs in the U.S. dropped by 40 to 624 in the week.


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Gold Ends Session Notably Lower, But Posts Near 10% Gain In Week

Trading 28 mar 2020 Commentaire »

Gold prices weakened on Friday as a decline in stock prices prompted investors to trim down positions in the safe-haven asset class in order to raise funds to meet margin calls.

However, a weak dollar limited the yellow metal's decline. The dollar index was down 0.64% at 98.72 about an hour ago.

Gold futures for April ended down $26.20, or about 1.6%, at $1,625.00 an ounce, after dropping to a low of $1,611.40 an ounce.

On Thursday, gold futures ended up $17.80, or about 1.1%, at $1,651.20 an ounce. For the week, gold futures gained about 9.5%.

Silver futures for May ended down $0.142 at $14.534 an ounce, while Copper futures for May closed lower by $0.0600 at $2.1720 per pound.

In economic news, revised data from the University of Michigan showed consumer sentiment in the U.S. deteriorated by much more than initially estimated in the month of March.

The report said the consumer sentiment index for March was downwardly revised to 89.1 from the preliminary reading of 95.9.

The consumer sentiment index is now down sharply from the final February reading of 101.0, reflecting the fourth largest one-month decline in nearly a half-century.

The Commerce Department's report showed personal income climbed by 0.6% in February, matching the increase seen in January. Economists had expected income to rise by 0.4%.

Meanwhile, personal spending edged up by 0.2% for the second straight month, matching expectations.


The material has been provided by InstaForex Company - www.instaforex.com