Forex news for North American trade on March 9, 2020:
- Trump says 'nothing is shutting down' due to coronavirus, compares it to the flu
- US stock market trading halted for 15 minutes
- Italy reports 9172 coronavirus cases, up from 7375 yesterday
- World Health Organization: Even if we call it a pandemic, we can contain it
- Senate Finance Committee chair Grassley is exploring targeted tax relief
- New York coronavirus cases rise to 142 from 105 yesterday
- German Bobl falls below -1.0%
- Swedish deputy central bank governor tests positive for coronavirus - report
- IMF: Virus stimulus should be targeted for cash transfers, wage subsidies and tax relief
- Canada January building permits +4.0% vs -3.0% expected
- Canada February housing starts 210.1K vs 206.5K expected
Markets:
- Worst day for US stocks since 2008. S&P 500 down 7.6%
- US 10-year yields down 22 basis points to 0.54%
- Gold up $3 to $1677
- WTI crude down $10.84 to $30.97 in worst day since 1991
- JPY leads, CAD lags
The moves in FX were relatively subdued in North American trading, but only relative to the insanity in stocks, bonds and oil.
USD/JPY was hit by some fresh selling on the stock market halt as it fell to 101.19 at the lows before rebounding about 100 pips in fairly short order. There was certainly an ebb and flow in stocks and bonds but USD/JPY was mostly in its own world.
EUR/USD was stuck close to 1.1450 all day as offers at 1.1485 capped rallies. There are huge hedges unwinding in this pair and that's mostly euro-positive but at the same time, suddenly rising yields in Italy and Greece are presenting some country-specific eurozone risks.
GBP/USD ran into offers at 1.3200 early in Europe and then never made an attempt above 1.3150 in North American trading as the range was limited to 50 pips.
The better trading action was in commodity currencies. Some kind of flows or unwind led to sustained AUD/USD buying for a couple hours and a rally into positive territory and 0.6685 -- more than 350 pips from the lows. It didn't last as the pair slowly gave back 100 pips.
NZD/USD did manage to close virtually unchanged. That looks like an unwind in positioning and other flows after the spike low to 0.6104 in Asia. A jump to 0.6448 was sold late to finish near 0.6336.
CAD was where the best volatility was found and that's no surprise given the wild day in oil. A puzzling fall in USD/CAD to 1.3530 at midday was eventually bought and the pair rebounded to 1.3700. Whether oil is $30 or $35 it doesn't make a material difference for Canadian crude as it heads to production shut-ins either way.
As for oil, it staged an impressive bounce to $34.50 from the Asian low of $27.34 but it faded late to $30.91.
