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US Dollar Index Climbs and Crude Oil Prices Fall

USD - United States Dollar

Broad-based USD strength is regaining momentum as drivers begin to realign. The COVID-19 pandemic is spreading, sending economies into comas and inevitably a recession. Policy support globally is continuing at a pace reflecting the gravity of the situation, but this will only help to cushion the blow and is not triggering any visible optimism. It is likely that as the situation pivots from a health crisis into a financial crisis that the USD will continue to extend its gains against emerging market currencies, but given the spike in U.S. cases, this could also change perspectives at any point in time.

Traditional safe-haven moves were in play on Friday as risk sentiment continued to wane with coronavirus cases continuing to climb. The U.S. Dollar index was 0.6% higher, which is measured against a basket of currencies, seeing highs of 100.80.

The non-farm payroll print showed an appalling reading of 700,000 lost jobs last month, a worrying sign for the U.S. economy with economist's surveys expecting a drop of 100,000. The official employment figure increased to 4.4% up from 3.5% in the previous month. Jobless claims this week are expected to be significant again with expectations of another 5 million citizens filing for unemployment in the United States this week. A wave of dismissals and redundancies is spreading across corporate America. Only weeks ago, businesses were hoping for a short interruption in operations; now, they are preparing for a severe downturn and substantial cash shortages. U.S. unemployment's claims doubled to 6.6 million last week from 3.3 million between 15th-22nd, that's over 10 million Americans filling for unemployment in March. Gap, Kohl's and Macy's alone have put more than 227,000 workers on unpaid leave last week, which will inevitably affect the up and coming U.S. economic figures.

Key Movers

Russia and Saudi Arabia, along with other large oil producers, are attempting to negotiate on an oil supply deal to stem the market from a crash. Some progress was made on Sunday, although financial news reports said that the virtual meeting between OPEC and its allies scheduled for Monday, April 6, has been postponed as tensions mount between Saudi Arabia and Russia. WTI crude trades 3.45% lower this morning at 27.36 a barrel.
U.K. Prime Minister Boris Johnson has been hospitalized for tests on Sunday and is expected to stay overnight after failing to shake off coronavirus symptoms, which included having a high fever for over ten days. Prime Minister Boris Johnson is "still very much in charge of the government" despite spending the night in hospital with coronavirus, Housing Secretary Robert Jenrick has said. Downing Street wanted to make it clear that this was purely a "precautionary step" taken on the advice of his doctor. Jenrick told BBC Breakfast: "We hope that as a result of these tests [the prime minister] will be able to come back to Downing Street as soon as possible. U.S. President Donald Trump is among those who has sent his wishes to Mr. Johnson. "All Americans are praying for him. He's a great friend of mine, a great gentleman and a great leader," Mr. Trump said, adding that he was sure the prime minister would be fine because he is "a strong person."

Expected Ranges

EUR/USD: 1.0768 - 1.0835 ▼

GBP/USD: 1.2201 - 1.2326 ▲

USD/CAD: 1.4081 - 1.4261 ▼

AUD/USD: 0.5986 - 0.6085 ▲

NZD/USD: 0.5849 - 0.5948 ▲