Demand for the USD Remains, And Oil Continues to Fall (Weekly Review)

2020-04-21
By cutting interest rates and expanding the asset purchase program, the US Federal system lowered fears of a USD liquidity shortage, and in these conditions, relative calm reigned in the financial markets. The EUR and the GBP tried to continue strengthening against the USD last week, but the USD is still a safe haven in times of crisis, and the growth of these currencies was again used for sales.

We also witnessed growth in the USD against the JPY and the CHF, while the USD ​​position, especially paired with the JPY, remains vulnerable, since the spread of coronavirus in the USA can negatively affect the country's economy and corporate income, and this stimulates the purchase of the JPY, a traditional ‘safe-haven’ asset in case of a stock market crash. Although stock indices closed the week on a positive note, the risks of another collapse still remain high.

OPEC + member countries were able to come to an agreement to reduce oil production, but a massive drop in global demand, a flood of cheap oil, and a shortage of storage contribute to bearish pressure on futures. Thus, black gold continues to fall in price, and its prospects remain extremely negative, but spot oil prices in the USA are approaching $10, which increases the risk of a rebound.

Schedule for this week:

Monday, April 20
09:00 GMT - Eurozone. Trade Balance;
12:30 GMT - USA. Chicago Fed National Activity.

Tuesday, April 21
01:30 GMT - Australia. Reserve Bank of Australia Meeting Minutes;
05:00 GMT - Australia. Reserve Bank of Australia Governor Philip Lowe Speaks;
06:00 GMT - Australia. ILO Unemployment Rate (3M);
09:00 GMT - Germany. ZEW Current Conditions;
09:00 GMT - Germany. ZEW Economic Sentiment (Apr);
12:30 GMT - Canada. Retail Sales;
14:00 GMT – New Zealand. GlobalDairyTrade Price Index.

Wednesday, April 22 
06:00 GMT – United Kingdom. Consumer Price Index (CPI);
06:00 GMT - United Kingdom. Core Consumer Price Index (CPI);
12:30 GMT - Canada. Bank of Canada Core Consumer Price Index (CPI);
12:30 GMT - Canada. Consumer Price Index (CPI).

Thursday, April 23
23:00 GMT - Australia. Commonwealth Bank Manufacturing Purchasing Managers Index (PMI);
05:00 GMT - Japan. Leading Indicators Index;
06:00 GMT - United Kingdom. Retail Sales;
07:30 GMT - Germany. Markit Composite Purchasing Managers Index (PMI);
07:30 GMT - Germany. Markit Composite Manufacturing Purchasing Managers Index (PMI);
08:00 GMT - Eurozone. Markit Composite Manufacturing Purchasing Managers Index (PMI);
08:30 GMT - United Kingdom. Markit Manufacturing Purchasing Managers Index (PMI);
12:30 GMT - USA. Initial Jobless Claims;
13:45 GMT - USA. Markit Manufacturing Purchasing Managers Index (PMI).

Friday, April 24
06:00 GMT - United Kingdom. Retail Sales;
08:00 GMT - Germany. IFO Current Assessment;
12:30 GMT - USA. Capital Goods Orders Non Defense Ex Air;
14:00 GMT - USA. Michigan Consumer Sentiment.

Author: Anthony Porter, IAFT Analyst

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