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Week Ahead – Emperor dollar reigns supreme amid market apocalypse

Posted on March 20, 2020 at 1:47 pm GMT

The virus pandemic continues to wreak havoc on the global economy and financial markets. Stocks are in freefall, commodity currencies are getting hammered, and even safe havens like gold can’t shine as the market meltdown is forcing major funds to deleverage by ‘selling everything’. In this panicky environment, investors are unlikely to pay much attention to economic data, though the US initial jobless claims might be an exception. The big winner from all the chaos is the greenback, which has [..]

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Aussie in trouble ahead of jobs data; is RBA about to launch QE? – Forex News Preview

Posted on March 18, 2020 at 12:35 pm GMT

Australia will publish employment data on Thursday at 00:30 GMT but with markets gripped by panic over the coronavirus, the focal point for investors is whether the Reserve Bank of Australia will join the quantitative easing (QE) club. The central bank is expected to hold an emergency meeting on Thursday (03:30 GMT) and is certain to cut rates. In the meantime, speculation on what it will do has pushed the local dollar to depths not seen since 2003. Australian economy [..]

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Will the SNB use its rate weapon to fight the coronavirus? – Forex News Preview

Posted on March 18, 2020 at 12:35 pm GMT

The Swiss National Bank (SNB) has a scheduled meeting on Thursday at 08:30 GMT and is expected to unleash its own stimulus package in response to the rapid spread of COVID-19 in Europe that has so far affected more than 2,000 people in Switzerland. While a rate cut is almost fully priced in by the markets, the SNB like its European counterpart may choose a different path to boost the economy. Another rate cut would not make much of a difference Last week the [..]

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Week Ahead – Pressure on Fed and BoJ to pump more stimulus; SNB meets too

Posted on March 13, 2020 at 1:50 pm GMT

As the coronavirus pandemic continues to wreak economic havoc across the globe, the pressure is on central banks to provide more stimulus amid the fast deteriorating outlook. The US Federal Reserve has already made an emergency rate reduction and is widely anticipated to follow it up with another cut next week. The Bank of Japan will be a more interesting one, however, as, although some action is certain, investors aren’t quite sure what form it will take. One central bank [..]

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Will the fragmented ECB disappoint markets? – Forex News Preview

Posted on March 11, 2020 at 2:33 pm GMT

The European Central Bank (ECB) will announce its policy decision at 12:45 GMT on Thursday and even though markets have fully priced in a 10 basis-points rate cut, economists disagree. Indeed, with the central bank nearly out of ammunition and policymakers divided, the ECB may only introduce targeted lending measures and ramp up its QE programme, not cut rates. If so, euro/dollar may spike higher. In the bigger picture though, it’s becoming difficult to envision a sustained rally from here. [..]

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UK budget could satisfy Tory voters; monthly GDP data may be shrugged off – Forex News Preview

Posted on March 10, 2020 at 3:29 pm GMT

UK GDP growth readings for January will be out on Wednesday at 09:30 GMT but the government’s budget may steal the show around 12:30 GMT as markets anticipate the new minister of finance to take actions against the deadly coronavirus outbreak. While the data may prove a weak market mover, the budget statement, although expected to come in less ambitious than some earlier reports suggested, may provide some floor to the pound if the government’s spending plans please the Tory [..]

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Softer US inflation may build case for more aggressive easing by Fed – Forex News Preview

Posted on March 9, 2020 at 3:32 pm GMT

Consumer and producer price figures – due Wednesday and Thursday, respectively, at 13:30 GMT – will be the main release out of the United States this week. But with the economic climate being presently overrun by the sweeping coronavirus epidemic, the data will probably be overlooked as policymakers pay more attention to forward looking indicators. It also means there’s likely to be more pain to come for the tumbling US dollar, which has been battered by the collapse in Treasury [..]

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Week Ahead – Will the divided ECB underdeliver?

Posted on March 6, 2020 at 2:48 pm GMT

The main event next week will be the European Central Bank (ECB) policy meeting, where markets are pricing in a 90% probability for a rate cut even though economists forecast no action. It’s a close call, but the fragmented ECB may opt for more targeted lending measures to shield the economy from the virus fallout, not a rate cut. There’s also a raft of economic data coming up, alongside the UK government budget. All told, markets will continue to dance [..]

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Chinese exports probably plunged in February on virus shutdowns – Forex News Preview

Posted on March 6, 2020 at 2:10 pm GMT

China will report trade numbers for February on Saturday – the first since authorities imposed lockdowns on many cities – and so the data will be seen as an important barometer to how badly business activity was impacted by the outbreak of the coronavirus. Any indication that the factory shutdowns had a far more devastating effect on the economy than is currently being predicted is likely to spark more panic selling of risk assets when markets open on Monday. January [..]

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Canadian jobs data may flag more rate cuts as loonie skids – Forex News Preview

Posted on March 5, 2020 at 3:11 pm GMT

After the Bank of Canada slashed interest rates this week, expectations are running high that more will follow, and the next clue may come from Canada’s jobs numbers on Friday (13:30 GMT). While the BoC’s bigger-than-expected cut this week was primarily motivated by the virus fallout, there have been a few other trouble spots lurking in the Canadian economy lately, which could weigh on the struggling loonie if they appear to have impacted employment growth in February. Jobs growth probably [..]

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