· Dollar squeezed as data stokes economic recovery hopes
The dollar was under pressure on Wednesday, after upbeat data in Europe boosted the euro and helped stoke hopes for a global economic recovery, underpinning appetite for riskier currencies.
The euro EUR=EBS is headed for its best month against the dollar since October, and inched higher to $1.1316 in the Asia session. The Australian dollar AUD=D3 led small gains in risk-sensitive currencies, firming about 0.2% to $0.6942.
The next test comes from a German business confidence survey due at 0800 GMT, with markets expecting another strong rebound.
In the meantime, the positive signals seem enough to offset worries about a resurgence in U.S. coronavirus cases, and to draw bets - reflected in a rising gold price - on broad dollar weakness.
Against a basket of currencies =USD the dollar was flat at 96.653, just above a one-week low touched on Tuesday. The trade-exposed Korean won KRW= was up half a percent and the Aussie's rise put it near the top of a range it has held for weeks.
The yen JPY= held on to overnight gains at 106.53 per dollar, reflecting caution and also corporate flows as investment juggernaut SoftBank (9984.T) started a $21 billion sale of its stake in U.S. telco T-Mobile.
· Fauci warns of ‘more and more’ coronavirus complications in young people
Dr. Anthony Fauci, the nation’s leading infectious disease expert, said Tuesday that doctors and infectious disease specialists are seeing “more and more” complications with Covid-19 in young people.
Early in the outbreak in the U.S., researchers said the virus appeared to be sparing young people while being particularly severe for the elderly and those with underlying health conditions.
That’s not the case, Fauci, director of the National Institute of Allergy and Infectious Diseases, said during a House Energy and Commerce Committee hearing. “To think young people have no deleterious consequences is not true. We’re seeing more and more complications in young people.”
Fauci said he’s never seen a single virus have such a wide range of symptoms.
· Washington state makes face masks mandatory as some states see new coronavirus surge
The governor of Washington state on Tuesday ordered residents to wear face masks in public as officials across the country sought new means to control the coronavirus pandemic while easing clamp-downs on residents and reopening the economy.
The move by Washington Governor Jay Inslee came as Arizona, California, Mississippi and Nevada reported record numbers of new cases of COVID-19, the illness caused by the novel coronavirus. Texas set a record on Monday.
Washington state, site of one of the first known outbreaks of COVID-19, saw its positive tests rise by 35 percent last week.
· German minister stresses coronavirus risk despite low infection numbers
German Health Minister Jens Spahn on Wednesday stressed that the coronavirus remains a risk after the western German state of North Rhine-Westphalia on Tuesday put two municipalities back into lockdown following an outbreak at a meatpacking plant.
Guetersloh and the neighbouring town of Warendorf became the first areas in Germany to fall back under lockdown measures that had been gradually lifted since the end of April.
· RBNZ Meeting
- Prepared to use additional monetary policy tools as needed, committed to reviewing quantum of QE program
- Prepared to provide additional stimulus as necessary, New Zealand has contained Covid-19 'for now'
- Prepared to expand LSAP program as necessary, government fiscal stimulus 'slightly larger' than assumed
- Cause for some confidence but economic challenges remain, to outline readiness to deploy alternative tools in August
· Tokyo expects 'large number' of new virus cases Wednesday: governor
Tokyo will record “quite a large number” of new coronavirus cases on Wednesday after a cluster of infections was discovered at an office, Governor Yuriko Koike said.
“Clusters in the workplace have become a big problem lately,” Koike told reporters, adding that test results from the same unnamed company were expected to add to the seven infections found there previously.
In addition, more than 10 positive results are expected from group testing in Shinjuku, Koike said, referring to an area of the Japanese capital known for its night life.
· Oil prices slides as U.S. crude stockpile growth heightens oversupply fears
Oil futures dropped on Wednesday, extending losses from the previous day, after U.S. crude stockpiles grew more than expected, adding to worries about oversupply.
Brent crude was down 29 cents, or 0.7%, at $42.34 a barrel by 0335 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 35 cents, or 0.9%, to $40.02 a barrel.
U.S. crude inventories rose by a much bigger than expected 1.7 million barrels last week, according to industry group the American Petroleum Institute (API), well ahead of analysts’ expectations for a 300,000-barrel build.
However, U.S. gasoline and distillate inventories fell, the data showed, feeding optimism that fuel consumption is picking up as some economies ease lockdowns imposed to contain the coronavirus pandemic.
U.S. government data will be released on Wednesday.
· Crude Oil Price Forecast – Crude Oil Markets Filling the Gap
West Texas Intermediate Crude Oil
The West Texas Intermediate Crude Oil market initially pulled back during the trading session on Tuesday but found enough support to turn around and rally to fill the gap above at the $41 level. The 200 day EMA is sitting just above, so you should keep in mind that the indicator will probably attract a lot of attention. With that being the case, I do like the idea of taking advantage of signs of exhaustion as we probably drop down towards the 50 day EMA. Ultimately, the market will go looking towards the range, which I think at this point it is likely we will see the markets bounce around between $30 and $40.
Reference: CNBC, Reuters, DailyFX, FX Empire
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