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The emergency rate cut from the United States Federal Reserve strained the remaining strength of the US dollar against the Hong Kong dollar. However, investors were waiting for worse such as a deep plunge from the pair. However, it appears that the collaborative and coordinated response of major central banks from different parts of the globe cushioned the impact of the 1.0-basis point rate cut from the Fed. Still, bears are widely expected to bring the pair lower in the coming sessions. The USDHKD pair is projected to reach its support levels by the beginning of April as the Hong Kong dollar holds on to its momentum. Hong Kong’s central bank is also acting to lessen the detrimental impact of the coronavirus to the country’s economy. It was reported that the bank required a capital buffer to ease the burden on local companies and lenders in Hong Kong. Financial institutions are now required to hold about 1% to 2% capital buffers.
The Singaporean dollar is feeling the intense pressure brought by the US dollar. Bears remain on the defensive as bulls continue to overpower them in trading sessions, pushing the USDSGD pair higher to levels last seen in January 2017. Since the month began, the greenback has successfully forced a sharp rally for the pair, and it’s expected that it will reach its resistance level in no time soon. In fact, since the fall of Singapore’s manufacturing rate reported this early March, bulls were able to turn things around for the pair. Also, considering that the United States Federal Reserve had just delivered two emergency rate cuts in just a tight time frame, the buck should have buckled in the foreign exchange scene. Fortunately for traders of the beloved single currency, that wasn’t the case because of the collaborative efforts of major central banks such as the Bank of England, Bank of Japan, and more to support the global.
The USDCNH exchange rate is seen steadying in sessions for now because of the negative NY Empire State Manufacturing index and the emergency rate cut yesterday. But eventually, the pair is projected to climb up again as bulls recalibrate and digest the recent rate cut from the United States Federal Reserve. Investors are taking a step back following the 1.00 basis point emergency rate cut unleashed by the US Fed. Still, the rate cut doesn’t end the hopes of bulls as heart-crushing figures from the Chinese economy bombards the yuan in the forex scene. Yesterday, official data from Beijing shows that China’s annual industrial production for February nosedived from 6.9% to an alarming -13.5%, rattling yuan investors. On top of that, the unemployment rate of the country jump by 1.00% from 5.2% to 6.2% according to recent reports. Also, China’s yearly fixed asset investment plunged from 5.4% prior to just -24.5%.
Despite the economic stimulus released by the US Federal Reserve, the Turkish lira remains on the back foot against the greenback. It’s been reported that the Turkish central bank is scheduled to have their meeting later this week on Thursday and consider possible economic stimulus to support the Turkish economy. Forex analysts and economists are debating whether the bank will actually follow in the steps of other major central banks in the globe and take action to counter the negative effects of the COVID-19 on the economy. Policymakers from Ankara are widely expected to deliver at least 50 basis points during their meeting on Thursday. Officials from Turkey said earlier that the government and the authorities will take extra measures to implement a series of economic stimulus to buoy the local market liquidity. Still, bears are concerned whether the immediate measures from the US will pressure the lira even further.