News

Dollar Erases Gains as Treasury Yields Fall Again

USD

The dollar index, which measures the greenback against a basket of major currencies, lost earned gains and dipped to 97.02. The dollar felt some relief yesterday following better-than-expected February economic indicators. However, the general picture remains gloomy for the future impact of the virus on the US economy as the US reported new cases. The US 10-year yields dipped again below 1%, and the US 30-year yields tumbled to 1.614%. The CME Fed Watch tool is showing an increased probability of two 25 basis points interest-rate cuts this year. Market participants are looking forward to the initial jobless claims, nonfarm productivity, and factory orders.

CAD

The Bank of Canada lowered interest rates by 50 basis points to offset the impact of Coronavirus on the Canadian economy. The board stated that the outlook is weaker than it was in January as the business activity fell in some regions, and supply chains have been disrupted. Also, like other central banks, the Bank of Canada expressed its readiness to act further if needed to ensure economic growth. The Canadian dollar weakened against counterparts where the USDCAD rose to 1.3431, and CADJPY dropped to 79.81, the lowest level since September 2019.

Metals

Gold prices traded in a tight range awaiting fresh fundamental drivers. The price of a gold ounce rose to $1652, but erased gains and settled near the open level at $1637. Also, the price of a silver ounce settled unchanged at $17.21, while palladium futures recovered slightly to $2458.

Oil

Oil prices drifted lower ahead of the OPEC meeting in Vienna today. Oil producers will attempt to reach an agreement to deepen and extend output cuts to ensure market stability. Oil-demand levels were hit by the outbreak of the Coronavirus, which disrupted supply chains and hammered business activity. On the other hand, the US Energy Information Administration reported a buildup of 0.785 million barrels in weekly crude oil inventories and an increase in production by 0.1 million barrels per day to 13.1 million barrels per day. The West Texas Intermediate crude futures fell to $46.67, and Brent futures plunged to $51.05.

Major Economic Events

GMT Country Event Expectation Previous

10:00

-

OPEC Meeting

-

-

13:00

UK

BoE MPC Member Haldane Speaks

-

-

13:30

US

Initial Jobless Claims

215

219

13:30

US

Nonfarm Productivity (QoQ)(Q4)

1.40%

-0.20%

15:00

US

Factory Orders (MoM)(Jan)

-0.10%

1.80%

17:00

UK

BoE Gov Carney Speaks

-

-

17:45

CA

BoC Gov Poloz Speaks

-

-

23:30

US

FOMC Member Kaplan Speaks

-

-

 
Disclaimer
 

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