Market News and Charts for March 17, 2020
Hey traders! Below are the latest forex chart updates for Tuesday’s sessions. Learn from the provided analysis and apply the recommended positions to your next move. Good day and Good Luck!
The pair has recovered from the recent plunge it experienced amid the coronavirus fiasco. The dollar gained against the safe-haven appeal of the Swiss franc after markets attempted to rebound. For central bank actions, the Swiss National Bank is expected to buck the central bank trend on Thursday and to not cut interest rates, which are already in the negative, to tackle the coronavirus pandemic, according to a survey. Economists suggested the SNB is going to ignore the cuts imposed by the Federal Reserve, the Bank of England, and others. Rather, the SNB’s decision will be influenced by the European Central Bank’s decision to not cut rates last week. SNB Chairman Thomas Jordan would instead keep the bank’s policy rate at negative 0.75%. The SNB has so far depended on market interventions to stem the demand for the safe-haven franc. Last week, the SNB lifted its currency market interventions to their highest level in more than three years.
The pair continues to plummet in recent sessions, as the sterling proves to be vulnerable to market crashes and global uncertainty, while the US dollar benefitted from the pound’s weakness. British government and central bank are coordinating to address the coronavirus situation in the UK. The government announced a massive rescue package of loans. There will also be grants for businesses in an attempt to stop the damage brought about by the coronavirus fiasco. Ministers pledged to help with mortgage payments as well as support for airlines, shops, and others in the hospitality industry. Government-backed loans, grants, and tax cuts for floundering companies would amount to 350 billion pounds, or $424 billion. In coordination with this move, the Bank of England said it would set up a new lending facility for affected businesses. Prime Minister Boris Johnson said, “We must act like any wartime government and do whatever it takes to support the economy.”
The euro also plunged against the mighty dollar as it nears another low. It’s a fresh two-week low as the dollar stacks up further gains after last week’s catastrophic market fall. The exchange rate continued to plummet as the buck is supported by fears of the COVID-19 pandemic. Meanwhile, the eurozone’s economic outlook continues to look bleaker as Italy and France now go under lockdown to contain the spread of the coronavirus. Euro traders are becoming increasingly pessimistic over the growing prospect of a recession for the bloc. At the same time, the German ZEW survey on economic sentiment plummeted to negative 49.5 in March, a level that is worse than expected by many. The German economy is the largest in the eurozone, so this result added to the recession fears already dominating the market. Eurozone traders will be keeping close tabs on the eurozone’s inflation data for the month of February, which will be released tomorrow.
The dollar rose against the Japanese yen as the dollar recovers from a huge decline last week. Even though the Bank of Japan increased its efforts to fight the negative effects of the coronavirus crisis, the steps from the Trump administration and the Federal Reserve proved to be showstoppers. The US government and the Fed unleashed multiple measures ranging from credit-lines to businesses to aid every American to combat the pandemic. The measures are the reason the US dollar was a Rockstar in the market today. For the Fed’s part, it opened six-month dealer credits for 90 days. The BOJ also didn’t hesitate to take steps to combat the deadly disease as it kicked off measures worth multibillion dollar to boost liquidity into the markets. Recently, the BOJ pledged to hold daily meetings that will include government officials and the BOJ representatives to revive the economy from the virus’ fatal shock.
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