Here is what you need to know on Friday, March 27:
The US dollar remains on the back foot after plunging on Thursday alongside the third consecutive rise in stocks, yet S&P futures are pointing to a downside correction. Investors are cheering the Federal Reserve's unlimited Quantitative Easing program announced early this week, backed up by Chair Jerome Powell's commitment to supporting the economy. He said the Fed would "not run out of ammunition."
The Fed's previous efforts to ease the distressed demand for the dollar are bearing fruit as well. Another factor is the Senate's $2 trillion fiscal package which will likely be approved by the House later on Friday. T
US jobless claims leaped to 3.283 million, an increase of 1,053% and far above expectations, as companies let workers go, temporarily or permanently. The devastating figure seemed to add pressure on the dollar but did not deter the market.
See:
- Three million is only the beginning, three reasons why the dollar may rise
- US labor market reels as initial jobless claims soar far beyond the previous record
GBP/USD was one of the primary beneficiaries of the dollar's sell-off, rising above 1.22 after trading at the 1.14 handle earlier in the week. The Bank of England left its policy unchanged in its third rate decision this month and after slashing rates and expanding its QE program. Chancellor of the Exchequer Rishi Sunak unveiled a plan to support almost all those who are self-employed.
While the Australian and New Zealand dollars also surged against the greenback, the Canadian dollar lagged as oil prices remain under pressure. See Oil trading is not for the faint of heart
Coronavirus continues spreading around the world, with over 530,000 infected and more than 24,000 deaths. The US has surpassed China with the number of cases with yet another surge in New York state. Italy and Spain have seen some stabilization in mortalities, yet hospitals in these countries are overwhelmed, and the number of cases remains elevated. Additional figures will be followed by markets. Data from these Spain early in the day, New York, and finally Italy, are all set to rock markets.
EU leaders are split on the need for common bonds, dubbed "corona-bonds" as Germany remains opposed to sharing debt, opposing demands from France, Italy, and Spain. Negotiations are set to continue. The European Central Bank continues buying bonds, easing its capital key rules, and ready to dust off the Outright Monetary Transmissions (OMT) program from 2012. EUR/USD has also gained, trading well above 1.10.
Chinese Industrial Profits year-to-date through February are down 38.3% yearly, the worst on record.
The University of Michigan's final Consumer Sentiment measure for March may show a downgrade, reflecting shoppers' concerns. See Consumer Sentiment Preview: Outlook equals consumption
Gold has been consolidating its gains trading above $1,600 but below the highs.
Cryptocurrencies are holding up in familiar ranges, with Bitcoin trading around $6,600.
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