We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Breaking news

Federal Reserve Announce $2.3 Trillion in Loans to Support Economy

Real Time News
  • Natural Gas Price Chart Exposes Bearish Signals - Nat Gas Forecast More details in the link below: https://www.dailyfx.com/forex/technical/article/special_report/2020/04/09/Natural-Gas-Price-Chart-Exposes-Bearish-Signals-Nat-Gas-Forecast-MK.html?CHID=9&QPID=917714 https://t.co/Gc2vdB14ha
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 1.24% 🇳🇿NZD: 1.01% 🇪🇺EUR: 0.66% 🇨🇦CAD: 0.55% 🇨🇭CHF: 0.50% 🇯🇵JPY: 0.21% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/ezlPWmoQsv
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Germany 30: 2.32% Wall Street: 2.04% US 500: 1.98% France 40: 1.72% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/oxdKK48tbV
  • New York Fed Purchases $14 B in Treasury Coupons
  • Democrats in the Senate block $250 billion small business stimulus plan $SPX
  • Oil on a roll...Brent =6.5% at $36.50/bbl...#oott #brent @DailyFX https://t.co/PzgnGu27p6
  • RT @lampidicsparrow: 20mbpd https://t.co/M05rMBbPAK
  • Hey traders! We are yet again back with a daily market update with @DailyFX Chief Strategist, @JohnKicklighter he answers if we are heading into a recession and what are the key market 📈 information to look out for today and the weekend. https://t.co/kYxCym8rxf
  • OPEC+ and other are to discuss cuts as big as 20mbpd, according to on Russian source #OOTT
  • Fed Chair Powell: - Will only scale back support when economy is recovering $SPX
AUD/USD, NZD/USD Sink as China Rate Cuts Fail to Impress

AUD/USD, NZD/USD Sink as China Rate Cuts Fail to Impress

2020-02-20 03:00:00
Ilya Spivak, Head Strategist, APAC
Share:

AUD/USD, NZD/USD, CHINA, CORONAVIRUS, STOCKS - TALKING POINTS:

  • AUD and NZD sink with stocks as China rate cuts fail to impress
  • Gold prices, Treasury bonds rise as risk aversion sweeps markets
  • S&P 500 futures suggest risk-off momentum likely to be sustained

The Australian and New Zealand Dollar sank alongside Asia-Pacific stock prices after China failed to impress financial markets with a widely expected injection of monetary stimulus. The US Dollar and Swiss Franc attracted the bulk of anti-risk capital flows in the G10 FX space while gold and US Treasury bond prices rose in tandem. The Japanese Yen struggled to follow suit as it digested yesterday’s selloff.

AUD/USD, NZD/USD Sink as China Rate Cuts Fail to Impress

Chart created with TradingView

China cut the prime rate on one-year loans by 10 basis points to 4.05 percent. The prime rate on five-year loans was reduced by 5 basis points to 4.75 percent. Both outcomes registered squarely in line with the markets’ baseline expectations, suggesting they had been priced into assets before the news hit the wires. The response from across the markets hints that investors found little to be excited about beyond this.

Taken together with the earlier release of FOMC meeting minutes that telegraphed little urgency in offering additional policy support, China’s action underwhelmed. That seems understandable against the backdrop of a broadening threat from the Wuhan-strain coronavirus. Japan reported two deaths linked to the outbreak and the number of cases in South Korea more than doubled in a single day.

Traits of Successful Traders
Traits of Successful Traders
Recommended by Ilya Spivak
Traits of Successful Traders
Get My Guide

More of the same looks likely ahead. A sharp drop in futures tracking the Euro Stoxx 50 index – a benchmark for Euro area stocks – as well as analogous contracts tracking the UK’s FTSE 100 and the US’ S&P 500 suggests risk-off asset price dynamics will carry through the remainder of the trading day. A relatively light day on the economic data seemingly offers few roadblocks to continuation.

TRADING RESOURCES:

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.