Greenback Bid at the End of Devastating Week – Guest Editorial

Dan Blystone

Thursday’s selloff on Wall Street marked its largest losses since the October 1987 crash says Dan Blystone

By Dan Blystone, Senior Market Analyst, Scandinavian Capital Markets. With 22 years of experience, Dan gained insight to the markets working at Altea Trading, ABN AMRO and Infinity Futures in Chicago. He is the founder of TradersLog and the Chicago Traders Group. Find out more about Dan by clicking here.

The US dollar surged against major rivals on Friday, as investors sought refuge in the world’s most liquid currency. The greenback reached its highest levels in a week against the Japanese yen and its highest levels since October against the British pound. 

Earlier this week, the euro rallied to its highest levels in over a year against the dollar. However, the single currency weakened on Thursday after the European Central Bank (ECB) announced more stimulus to fight the economic impact of the coronavirus but disappointed markets by refraining from lowering interest rates. ECB president Christine Lagarde was criticised after refusing to assume the ‘whatever it takes’ stance of her predecessor Mario Draghi. 

On Thursday, the Federal Reserve Bank of New York took steps to inject more than $1.5 trillion into short term funding markets as stocks plunged due to fears over the coronavirus. Analysts anticipate that the Fed will slash interest rates further at the conclusion of the March 18th meeting. The CME Fedwatch tool currently indicates a 55.7% chance of a 100 basis point cut, to a target range of between 0 and 0.25%. Earlier in March, the Fed made an emergency 50 basis point cut in its benchmark funds rate to address the coronavirus threat.

Meanwhile, risk-sensitive currencies such as the Australian dollar and the Canadian dollar staged a modest bounce from multi-year lows in early trading on Friday. On Monday, oil-linked currencies such as the Canadian dollar, Mexican peso and Russian ruble were crushed after Saudi Arabia pledged to aggressively boost production and cut prices.

Asian markets fell sharply on Friday, but European stocks and US stock index futures are trading higher at the time of this writing. Thursday’s selloff on Wall Street marked its largest losses since the October 1987 crash.

The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.

Read this next

Metaverse Gaming NFT

DCentral Miami brings together all of Web3, NFT, DeFi, Metaverse

The world’s biggest Web3 meeting entitled DCENTRAL Miami is set to take place November 28-29, featuring a lineup of some of the biggest and most influential names in the blockchain space.

Digital Assets

Crypto ban expands across UK banks as Starling joins ‎crackdown

UK digital bank Starling has banned ‎all customer payments related to cryptocurrencies, another blow for the crypto traders ‎who recently saw a sizable number of banks deciding not to ‎finance the wobbly asset class.‎

Interviews

Markets Direct at FIA EXPO 2022: Traders know what they want from brokers

The FIA Expo 2022, one of the most prestigious events within the global derivatives trading industry, took place in Chicago on 14 & 15 November.

Interviews

FIA Expo 2022: TNS addresses public cloud limitations with hybrid infrastructure

November is the month of the FIA Expo, one of the largest futures and options conferences in the world, bringing together regulators, exchanges, software vendors, and brokers in one place: the Sheraton Grand Chicago Riverwalk. 

Retail FX

Italy’s regulator blacks out Finance CapitalFX, MFCapitalFX

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

Suspected leader of Honk Kong ramp-and-dump scam appears in court

A leader of a sophisticated ramp-and-dump scheme made his first court appearance in a Hong Kong court today, charged with market manipulation and various criminal offences. The case stems from an earlier joint operation of Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), and the local police. 

Institutional FX

Cboe’s James Arrante discusses growing demand for fixed income, FX algo

We caught up with James Arrante, senior director of FX & US treasuries product and business management at Cboe Global Markets, to uncover emerging trends in the FX and fixed income markets and learn more about the bourse operator’s recent initiatives.

Retail FX

Eurotrader acquires UK broker Petra Asset Management

Eurotrader Group has formally entered into the UK market with the acquisition of FCA-regulated broker, previously named Petra Asset Management Ltd. The new entity operates under the brand name Eurotrade Capital Ltd.

Inside View, Retail FX

The Game of Chess Continues – OPEC, China and the Oil Market

Over the past decade, the US has been complaining about the amount of power which the BRIC group, and specifically China, has on the global economy. BRIC stands for Brazil, Russia, India and China; these were the world’s fastest growing economies. Only in the past 10 months, the US has turned their attention toward OPEC due to the prices of fuel. Nevertheless, China seems to have a strong influence even over the price of crude oil.

<