The USD on Friday’s Asia Pacific Trading
The USD remained broadly depressed as a few exchanges will be closed during today’s Asia Pacific forex trading session. US initial jobless claims and the Federal Reserve’s stimulus announcements kept the dollar slow.
Asian FX markets had varying performance after overnight gains on Wall Street. US equity futures rallied as Treasury yields traded on the back foot.
USD/JPY stay bid around 108.50 while AUD/USD was at 0.6350. Despite the oil weakness, USD/CAD fell below 1.4000.
Meanwhile, the EUR and the GBP held on to recent gains and GBP/USD extends gains towards 1.2500 amid Good Friday. The cable traded better with UK Prime Minister Johnson’s improving health condition.
As Eurogroup agreed to half a trillion euros worth of COVID-19 rescue package, the EUR/USD ranged between 1.0920-50.
The USD on Risk Trends
The USD fell against the Taiwan dollar Friday, shedding NT$0.049 to close at NT$30.103. The U.S. currency opened at the day’s high of NT$30.130, and moved to a low of NT$30.055 before rebounding. Turnover totaled US$638 million during the trading session.
This weekend’s lack of major economic data places the focus for foreign exchange markets on risk trends. Australian FX markets are closed but Japanese ones will be online.
Good Friday led thin market conditions as most major world markets will remain closed on account of the Easter Holiday.
The markets expect a lower than usual liquidity conditions. Given general elevated volatility levels, forex can be susceptible to sudden breaking headlines.
Moreover, cautious optimism may continue boosting the Aussie while placing the American currency at risk.
The USD Drifts Lower as the Pound Recovers
The Fed’s massive new lending program for small companies and signs of a slowdown in COVID-19 cases reduced USD demand.
Currencies from oil-producing countries also gained against the U.S. currency but the outlook remains uncertain.
Risk sentiment has steadily improved this week on signs that the virus is slowing in U.S. and European hotspots. But some analysts remain cautious for the reason that so little is known about the virus. Nations continue to struggle with the massive economic damage caused by the outbreak.
Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo said the Fed has taken a lot of different measures. But the end result is a large increase in dollar supply.
He said positive news about the coronavirus reduces the kind of panicked repatriation into dollars that they saw earlier. The end result is gradual dollar weakness, Ishikawa added.
In other news, commodity currencies eye OPEC+ oil output.
