Daily Market Update

U.S. Dollar Loses Ground, Stimulus Awaits

March 24, 2020

The U.S. Dollar retreated some this morning as markets are hoping to rebound as the U.S. Senate gets ready to vote on a stimulus package that can complement the Fed’s historic course of action yesterday.

Overview

Naturally, things are not normal, and we are seeing swings up that can come down just as quick for all currencies across the board. Some appetite for risk made a return in Asian and European trading sessions as investors jumped on the lowest values since 2016. Domestic stocks are looking for some reprieve a from government intervention in the midst of uncertainty as the Dow Jones Industrial Average is on track for its worst monthly drop since 1931.

Social distancing and state mandated measures are keeping most people home and only essential businesses open. The inactivity in other nations is being addressed as well with similar, if not tougher, measures and easing. Nevertheless, many economists fear we could experience digressionary pressures if indeed we suffer unemployment rates in the 20.0-30.0% as many entities, restaurants and shops are unable to cope without commerce.

COVID-19 meanwhile remains a growing threat with more confirmed cases and deaths in the U.S. and worldwide every day. Things hopefully get better from here as awareness, medical efforts, and work towards relief keep growing as well.  China and other Asian nations are seeing populations starting to normalize life a bit with many going back to work across industries.

 

What to Watch Today…

  • U.S. Composite PMI at 9:45 AM

Complete Economic Calendar can be found here.

 

EUR

The Euro jumped as most other peers after a 10-sesssion winning streak for the greenback that has come to a halt. Data is likely to start showing the damage from the virus threat after the release of Markit Euro-zone Purchasing Managers Index for the month of March certainly confirmed a decline from expectations. The composite reading of 31.4 showed a contraction steeper than thought at 38.8. The survey showed increase in manufacturing, but definitely a lack of faith entirely in the Services sector as many are held away from work. Companies are doubtful they can invest or spend at all.

 

GBP

The Pound was also a beneficiary of the improved sentiment or at least the temporary feeling that things should try mounting a comeback from here. The S&P and other indices simply reverse from gains to losses day to day and about $26.0 trillion has evaporated from equity markets since mid-February. Aggressive spending like the one announced in London over the weekend should mean less stress, less tension. The government has also offered job guarantees. All eyes are on the steps that will be taken here.

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