On the last trading day of the week, markets enjoyed a modest risk recovery on the positive coronavirus news and rebound in oil prices. Most currency pairs gained ground amid the USD downside correction from three-year highs while the US stock equities and major Asian indices edged higher.
According to the latest information from China, there are no new coronavirus cases in Hubei province for the second consecutive day while in mainland China the number of patients continues to decrease. South Korea reported 87 new cases, two times less than on Wednesday when the number stood at 152. Both China and South Korea confirmed only 3 new deaths. And though Italy is still hardly hit by the pandemic and the number of patients in the US keeps on rising, good news from Asian counties calmed investors down and improved the market’s mood.
Moving to the fx market, most majors attempted to pair losses and edge higher. EURUSD left behind 2020 lows and reclaimed the 1.0800 mark while GBPUSD rebounded from three-decade lows in the 1.1400 area and gained over 200 pips.
The Aussie was the best performer as in the Asian session AUDUSD recovered more than 250 pips, took the 0.5800 mark, capitalized on the strong surge and rallied to 0.5900 and beyond. The rise was determined by the RBA’s announcement to purchase A$5bln government bonds with maturity within 2 and 8 years. In its turn, the National Australia Bank (NAB) issues a package to support businesses and individuals. The package envisages rate cuts on new loans and allows home loan clients who experience financial problems to suspend their loan repayments for up to 6 months.
The Kiwi followed suit and broke the 0.58 mark while USDJPY lost traction amid the weak USD and declined below 110.00.
As there’re no significant macro releases today, coronavirus headlines will continue to set traders’ sentiment and determine most pairs’ dynamics. If positive news prevails, the situation on markets may more or less stabilize however the negative economic impact is already quite tangible.