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The Dow's Biggest One Day Surge Since 1933 Overshadowed by COVID-19

USD - United States Dollar

New York continues the bear the brunt of infections in the States, with cases doubling every three days. Despite this grave situation, Donald Trump yesterday said he wants America back to work by Easter, less than three weeks from now. Many see this target as optimistic at best as cases continue to skyrocket however the Dow Jones saw its biggest one day surge since 1933 rising 11.4% reclaiming the 21k handle. The approval of a US stimulus package and the Federal Reserves unlimited QE programme appear to have calmed markets around the world along with the number of new cases in China looking to have ceased.
The US dollar fell against the majority of significant counterparty through trade on Tuesday as investors responded to the unprecedented stimulus measures enacted by the Federal Reserve on Monday. Emboldened markets drove equities higher and began unwinding last week's panic led liquidity push forcing the world's base currency index lower for the first time in the previous 11 days. With the pace of spread across Europe slowing this week, the US, in particular, New York City, has emerged as the new epicentre in the ongoing battle against COVID19. The US has been criticized as being to slow to react to the threat of the coronavirus and modelling suggest the health impact within the States could outstrip hotspots in Italy, Spain and even China.

Key Movers

The Great British Pound was the days' big mover, bouncing back against the USD and testing moves through 1.18. Having touched a 35 year low last week, sterling found support in a renewed demand for risk and a broader softening in the USD. The GBP remains vulnerable to broader risk sentiment swings with is ballooning current account deficit making it particularly vulnerable to risk-off moves.
Attentions remains squarely affixed to the COVID19 pandemic. While we anticipate most currency will recoup much of the losses suffered against the USD in time, the world's base currency will continue to find support as long as the pandemic continues. The pace of spread across the globe remains mostly unchecked.

Expected Ranges

EUR/USD: 1.0760 - 1.0849 ▲

GBP/USD: 1.1711 - 1.1973 ▼

USD/CAD: 1.4296 - 1.4461 ▼

AUD/USD: 0.5935 - 0.6073 ▼

NZD/USD: 0.5793 - 0.5912 ▼