Charts and Market Updates May 13, 2020

Good day traders! Check now the most recent charts and market updates for today’s session. Learn more about analysis and be updated on the current happenings in the market!

AUDNZD

The RBNZ defied expectations by analysts of another interest rate cut. New Zealand’s central bank last cut its interest rate in March 15 by 75 basis points to lessen the economic impact of the coronavirus. However, analysts are worried that the cut will not be enough to sustain liquidity in the market in the long run. But the impressive handling of the pandemic by the country’s prime minister resulted in fewer cases and deaths. This raised hope among investors that COVID-19 will not disrupt the local economy. In relation to this, PM Ardern will begin easing the country’s restrictions due to the virus after eight (8) days. The successful combat of NZ against the pandemic can be traced back using the report on external migration. As early as January, the country already locked its borders to prevent the virus from infecting New Zealand. On the other hand, Australia is facing a slump in employment in today’s report amid the continued lockdown in the country.

EURBRL

Brazil was among the countries hit the hardest by the coronavirus pandemic in the Americas. Aside from being the largest economy in South America, Brazil’s service industry comprised 76% of the country’s GDP. This means that the lockdown in Brasilia would slash a big chunk of foreign direct investments (FDI). At the same time, it would minimize tourists visiting the country, thus, a decline in the services sector. A report from yesterday, May 12, showed Brazil’s service sector declining by 6.9%. The figure was from the month of April. As Brazil and other countries continue their lockdown, analysts anticipate that the services sector will further decline next month. It’s trade deal with the European Union was supposed to act as a buffer on its economy. However, with issues and disagreements arising from both parties, the EU-Mercosur deal might not come into fruition despite signing the deal after more than 20 years of negotiation.

GBPBRL

An economist warned that the UK’s economy will be in a bloodbath once Q1 GDP report is released. This warning was further intensified by the Bank of England (BOE) after saying it is ready to provide more liquidity in the market. The statement confirmed that an impending disaster in the British economy is imminent. Furthermore, the British central bank said Britain could contract into its deepest recession in more than 300 years. The coronavirus is a double whammy for the UK economy as the slowdown in post-Brexit UK was confirmed in several reports. In addition, tension is high between the United Kingdom and the European Union after the latter accused the UK of not living on its transitionary agreement. These could increase the prospect of the British pound ending its bull run against the Brazilian real. Brazil is also facing an economic turmoil. However, Britain’s negative sentiments will weigh more on the pound in coming sessions.

RUBNOK

The ruble and krone pair experienced high volatility in the previous sessions. This was due to the slump in crude oil prices, which are major exports of Russia and Norway. The coronavirus pandemic further added pessimism on these two (2) economies. Yesterday, Norway reported a disappointing figure for its Q1 GDP 2020 report. The figure was recorded at negative 1.5%, the lowest since the European Debt Crisis in 2010. Analysts see a better Q2 report for the Scandinavian country after it eases restrictions as early as April. On the other hand, Russian President Vladimir Putin gave a green lift some restrictions yesterday. This was after Moscow’s economy suffered a major blow from the crude oil production cut. Russia started the price war with Saudi Arabia after it exited with its production cut agreement with OPEC to prop up crude oil prices. In the end, Russia agreed to cut oil production bigger than what it agreed before the price war.