News & analysis

USD is lower against most major currencies today, with JPY the sole loser among the G10. The week’s biggest news so far remains yesterday’s proposal for a mutual Eurozone recovery fund by the German and French Governments.

EURUSD has hung on to all of its gains from yesterday, and the euro has managed to advance further today. US equity markets will be in focus this afternoon after a big day of gains yesterday, as will double-act testimony from Jerome Powell and Steve Mnuchin at 15:00 BST.

News & Views:

  • Powell and Mnuchin’s testimony to the Senate Banking Committee begins today at 15:00 BST. Both have released statements on the testimony, which will be on the $500 billion in direct bail outs and emergency lending programs underwritten by congress. Some $259 billion remains unallocated and is likely to be the focus of testimony. 
  • NZD higher after Assistant Governor Christian Hawkesby said no further stimulus needed after last week’s updated budget. The RBNZ almost doubled the size of its QE at last week’s meeting. 
  • JPY continues to struggle this afternoon, and is the sole loser among the G10 currencies against the US dollar. The marginal catalyst has been the announcement of an emergency meeting on Friday to discuss the details of a new business support scheme.
  • Sterling is also higher today, despite this morning’s jobless claims data, which showed a record 856,000 claims made in April.
  • The euro has continued yesterday’s rally today, while Eurozone periphery sovereign debt has also seen further gains, including debt from Spain and Portugal. However, this morning, the Finance Minister of Denmark spoke against yesterday’s debt proposal, saying “There is a well-known position from Denmark, and that has not been changed by the German-French proposal”. 

 

JPY lone loser vs USD

 

Author: Ranko Berich, Head of Market Analysis

 

 

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