The U.S. Dollar is king in the midst of chaos after yet another market rout that decimated the value of almost every asset out there, in particular the stock markets, which once more registered record-low one-day moves.
Overview
Per the Bloomberg Dollar Spot Index, the buck is the strongest seen since March 2017. Things are looking dire. The coronavirus medical response is considered to have been slow and the reality of economic inactivity threatens to derail them lives of many. Savings are low for the population and cash-compensated service men and women could see themselves strapped.
The large stimulus by the Fed is unlikely to impact directly the individuals that most need relief during this time, admittedly so according to Chairman Jerome Powell, but the hope is that there is a fiscal injection that perhaps translates into direct cash to individuals. Some economists and legislators are proposing bailouts for the airline industry as well as for the bars/restaurant sector with interest-free loans and other measures to help them stay afloat. Asian markets stopped the bleeding overnight and domestic stocks are set to possibly rebound as some expect less sell-off mode after yesterday’s historic session.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
EUR
The Euro is back to its weakest point since the end of February as swings continue for thee beleaguered shared currency that encompasses nations in total lockdown. Strict measures, a large elderly population, and an aging medical system are starting to take a toll on modern-day productivity and that is translating into some awful statistics. Failure to truly contain the virus and prevent its spread are having catastrophic consequences. We will get the first glimpse at the economic impact when we see March Purchasing Managers’ Index figures on Tuesday the 24th.
AUD
The Oceanic currencies are also declining big time with “Aussie” and the “Kiwi” (NZD) hitting fresh 11-year lows. A world where globalized supply chains are interdependent, the far-away island nations are suffering from the chaotic nature of the disease elsewhere.
All assets being turned into USD means cash is what you want to have in your pocket especially if food and medicine are to be purchased while uncertainty remains over the negative impact to the economy. Some analysts and investors have suggested shutting down markets temporarily as well and ease financial tensions.
