US Dollar Dips to Find Support, NZD/USD Surges - US Market Open
- Coronavirus Drug Hopes and Economy Re-openings Boosts Sentiment
- US Dollar Weakens on Renewed Optimism
- New Zealand Dollar Edges Higher
Equities: Equity markets are firmly in the green with risk assets supported by increased hopes over the effectiveness of the Remdesivir drug in treating patients with coronavirus. Alongside this, markets have also taken kindly to plans by the Trump administration to reopen the US economy. Subsequently, risk sentiment has shrugged off the extremely weak Chinese data, in which GDP contracted by 6.8%, against expectations for a drop of 6.5% (first contraction since 1992).
However, in light of the optimism surrounding Gilead’s drug trial, the company had later stated that the anecdotal data does not provide statistical power to determine safety and efficacy and thus the current rally in risk may be somewhat of an overreaction, leaving equities vulnerable to a fade. That said, eyes will be on the phase 3 results due to be released at the end of this month.
USD: Broad based dollar losses, particularly against high beta currencies (AUD, NZD). That said, the greenback remains within close proximity to the 100 handle. As such, with the macro backdrop continuing to remain fragile, dollar dips may find support from 99.50.
NZD: A strong showing for the New Zealand Dollar, gaining over 1.1% while cross-related selling in AUDNZD after the rejection from 1.06 has also provide a boon for the Kiwi. However, with NZDUSD struggling at 0.6040 this raises the risk of a pull-back in the short-term.
Source: Refinitiv, DailyFX
Economic Calendar (17/04/20)
WHAT’S DRIVING MARKETS TODAY
- “British Pound (GBP) Latest: GBP/USD Sell Off Eyes Support” by Nick Cawley, Market Analyst
- “DAX, Euro Stoxx 50 Outlook: Coronavirus Vaccine Hopes Risks Being Faded” by Justin McQueen, Market Analyst
- “USD/MXN – US Dollar Trying to Build a Strong Base vs Mexican Peso” by Paul Robinson, Market Analyst
--- Written by Justin McQueen, Market Analyst
Follow Justin on Twitter @JMcQueenFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.