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The Greenback trades lower following Chinese measures to boost its economy.

Friday 24 April, 2020

Daily Currency Update

USD - United States DollarFinally, the U.S. House of Representatives passed a $484 billion package, restoring funding to aid small businesses and provide support for hospitals and virus testing. At the same time, U.S. infections rose at the slowest pace in three weeks and China reported no deaths for a ninth straight day. The U.S. dollar gained strongly overnight versus most major currencies. A report suggested the Gilead coronavirus drug was a bust, which instigated a bit of a risk off environment. However, the U.S. dollar has erased all of its gains at the time of this writing, which aligns with a flat market with all the different asset classes (i.e. there is not a clear direction in the equity markets).

Key Movers

There is no Canadian economic data scheduled for release today, but the Canadian dollar is trading slightly higher versus most of the majors. For instance, it is increasing 0.1 percent versus the Euro, 0.08 versus the Kiwi dollar, and 0.09 versus the U.S. dollar. On a day such as today with little news, the Loonie usually follows macro asset classes such as the equity market indices (S&P 500) and crude oil. Both are increasing 0.6 and 2.3 percent at the time of this writing. Crude oil is continuing to erase losses as attention has turned to output cuts in response to the demand hit from coronavirus lockdowns.U.K. Prime Minister Boris Johnson plans to return to Downing Street as early as Monday following his recovery from Covid-19. The Pound versus the U.S dollar is increasing 0.1 percent this morning, but, technically speaking, the GBP/USD pair has been trading weaker over the last few days and it is following a downtrend without going higher than a declining resistance, which prints a bearish setup in the charts and likely lower prices in the short-term.In an effort to support its economy, China’s central bank injected 56.1 billion Yuan (US$ 7.9 billion) into the banking system via debt instruments, rolling over some of the debt that comes due, while cutting interest rates on the loans. China’s 2020 economic growth is expected to be below 2 percent, according to an economic survey. Also, last week, Chinese data showed the first contraction in decades in the first quarter.

Expected Ranges

  • USD/CAD: 1.3953 - 1.4109 ▼
  • EUR/USD: 1.0727 - 1.0828 ▲
  • GBP/USD: 1.2250 - 1.2400 ▼
  • AUD/USD: 0.6327 - 0.6400 ▲
  • NZD/USD: 0.5963 - 0.6047 ▼