Let’s check the market. After the monetary meeting, there will be a press conference at 1230 GMT in Frankfurt. Nevertheless, it is no certainty since the rates are already at a record-low -0.5%. Further cuts might hurt bank margins and squeeze lending. Meanwhile, not far away from a January 2019 high of near $1.15 hit on Monday, the euro steadied around $1.12585.
On Thursday, as risk aversion was the dominant theme in currency markets, European and Asian stock markets were a sea of red. It forces traders to stampede out of currencies heavily geared to the global economy, such as the Norwegian crown and Australian dollar.
Trump announced a ban on travelers from 26 European countries entering the United States for a month, on Wednesday. He unveiled economic steps to counter the virus. Nevertheless, his address from the Oval Office was light on remedial measures beyond assurances that the virus has no chance against them.
Their traders forecast a cut to the first deposit rate by ten bps. Market watchers’ focus is now on the European Central Bank. By the lack of broad measures in Trump’s plan to fight the pathogen, traders were very much disappointed. Moreover, the latest ban poses a new disruption to the global economy. Traders prompt to bet on further aggressive easing by the Federal Reserve.
Last week, there was a hefty half-point. Thus, by next week money markets are now expecting another 100 bps of easing from the Federal Reserve, taking the policy of the benchmark interest to zero. Moh Siong Sim is a currency strategist at the Bank of Singapore. He said that the market was looking for more.
The Japanese currency versus the dollar climbed 0.8% to 103.65 yen just below a four year high of 101.28 hits on Monday in early London trading. The Swiss franc versus the dollar rose 0.2% to $0.9365. The euro is on a steady track.
That is leading news for now.
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