Forex Today: Dollar the strongest as risk aversion rules
|Here is what you need to know on Monday, April 6th:
- Risk aversion leads the way. The coronavirus pandemic continues to take its toll on economic developments, with the US losing 701,000 jobs’ positions in March, much worse than anticipated. The unemployment rate in the country jumped 1 full digit from 3.4% to 4.4%. The final readings of March Services PMI for most major economies suffered downward revisions to record lows.
- The US Federal Reserve announced on Friday it would dial back the daily pace of bond-buying to $50 billion a day starting this week, down from the initial buying of $75 billion, a positive sign toward some financial stability.
- The coronavirus continues to spread. The US is the epicenter of the pandemic, with over 310,000 cases reported from a global total of 1.22 million. The death toll is at 66,500. At some point, these numbers will become irrelevant, amid the uneven proportion of the tested population in each nation.
- The American currency appreciated against its major rivals last week, as it’s still the preferred safe-haven, followed by gold. The US ISM Non-Manufacturing PMI was upbeat in March, printing at 52.5, backing the dollar’s momentum ahead of the close.
- The shared currency remains the weakest, while the Pound is the most resilient to the dollar’s demand. The EUR/USD pair is under pressure around 1.0800 while GBP/USD trades below the 1.2300 threshold, at risk of extending its slump.
- Commodity-linked currencies ended the week with losses, despite oil and gold settled at weekly highs. Spot gold closed the week at $1,616.20 a troy ounce, while WTI ended at $28.50 a barrel, a two-week high.
- Cryptocurrencies spent the weekend consolidating in tight ranges near their recent multi-week highs.
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