Daily Currency Update

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The Greenback trades sideways after the release of a very balanced European Central Bank monetary policy.

USD - United States Dollar

The U.S. dollar continues to trade sideways following a relatively balanced speech from Christine Lagarde. The only piece of economic information came from the unemployment insurance weekly claims, which came in at 211k. This represents an increase of 6k from the previous week. See the key movers section below for more details.

Key Movers

In the FX world, the mood is deteriorating. Safe-haven currencies are being favored, which usually does not help Asian currencies such as the Yuan. One of the reasons for this is the ongoing concern about the coronavirus. Just a few minutes ago, Singapore confirmed the first case of the virus as the outbreak grows. The offshore Chinese Yuan has fallen 0.28 percent versus the Greenback this morning.

A few minutes ago, the ECB left their refinancing rate unchanged at 0 percent, and their deposit facility rate at -0.5 percent, as expected. It was one of the least exciting ECB policy meetings in more than five years, and it was visualized through the options market - a sophisticated financial tool in the capital markets. Remarks from Lagarde are usually very balanced, but she said that the ECB would be over when it is over, sending the Euro to a new low (1.1053 intraday low) not reached since December 2019. The Euro initially spiked, capturing many buyers on the back foot - it had reached 1.1108 initially right after Lagarde opened her press conference, but all those gains are gone. Lagarde refused to reveal her preference for an inflation strategy and pointed to a moderate increase in inflation. She also did not want to make comments on the Riksbank in Sweden, which wants to reverse negative rates.

The last piece of information that might not send the Euro even lower is Lagarde's comments that the ECB will take a look at the adverse side effects of negative rates.

Expected Ranges

USD/CAD: 1.3121 - 1.3172 ▼

EUR/USD: 1.1039 - 1.1100 ▼

GBP/USD: 1.3100 - 1.3212 ▼

AUD/USD: 0.6800 - 0.6852 ▲

NZD/USD: 0.6582 - 0.6611 ▼