The G-10 rundown
USD – the USD is in the process of turning lower – first against the most liquid DM’s and likely only later vs. riskier G10 and maybe even much later versus EM’s once we get toward the bottom of this crisis.
EUR – the euro has turned the corner versus the US dollar as the US will mount ever escalating efforts from here to bring the liquidity needed to get ahead of the crisis. The difficulty will be in gauging the risk of throwback magnitude in EURUSD on existential risks for the EU on its coronavirus crisis response. 1.1200 is the first major line in the sand there.
JPY – JPY crosses are clearly the high beta currency pairs to risk appetite – we still like USDJPY lower, but recognize the risk of a stop-out on spot positions – traders not wanting to take the risk in the volatile spot market might consider long put spread positions (caps the upside potential, but raises the breakeven level)
GBP – sterling has done well over the . It is nigh impossible to quantify the coronavirus risks for the UK and sterling relative to other mainland countries, but the UK government is certainly ready to move more quickly with mitigating fiscal measures, which could keep sterling a relative safe harbor here – more above in the GBPUSD chart caption.
CHF – if EURCHF was maintaining above 1.0600 due to SNB intervention, it appears the latter is failing – and look at the crazy comeback in CHFJPY – suggests that JPY will outperform if this proves a false dawn for risky assets.
AUD – investors Down Under bracing for a recession and QE on the way, keeping a lid on AUD rallies – still concerned that AUD can’t turn the corner until we have turned the corner on the global outlook.
CAD – USDCAD is having a look at the highest reaches of the range since 2017 as 1.3800 approaches – above there we only have. Up to oil markets and further general deleveraging panic for we realize potential toward 1.4000+
NZD – surprised to see AUDNZD still so heavy overnight despite Xi in Wuhan and a comeback in the copper price – not sure liquidity reliable enough for the pair to be sending reliable technical signals at the moment.
SEK – EURSEK ripped all the way to 10.80+ on yesterday’s market meltdown (and perhaps aggravated by the margin by a Riksbank deputy governor announcing he is infected with the coronavirus). Yesterday showed that SEK remains vulnerable to these deleveraging events.
NOK – a solid comeback for NOK overnight on the oil bounce – but that bounce needs to extend far more profoundly to engineer a EURNOK reversal – which technically requires a move back below 10.25.
Upcoming Economic Calendar Highlights (all times GMT)
- 0900 – Norway Feb. Region Survey
- 2200 – Australia RBA’s Debelle to Speak
- US Democratic Primary elections – Idaho, Michigan, Mississippi, Missouri, North Dakota, Washington