Let’s check the market. The euro has been one of the currencies to climb on the broad-bases dollar weakness of recent weeks. On Wednesday, the common currency was 0.31% lower at $1.1136.
Stephen Innes is a chief market strategist at Australian FX services provider AxiCorp. He said referring to the European Central Bank it has deflated the euro balloon a bit, with the European Central Bank about to cut imminently.
Due to the coronavirus outbreak, the Bank of Canada slashed its benchmark interest rate to 1.25% from 1.75%. The Bank of Canada also said that it was prepared to cut again if needed to support economic growth. Thus, on Wednesday, the Canadian dollar weakened the greenback.
Andrew Bailey is the incoming Bank of England Governor. He said that action might be needed to offset the effects of the virus. Thus, on Wednesday, the sterling headed for its best day against the euro in two weeks and inched up from 4-1/2-month lows against the dollar.
European Central Bank
Curbing expectations the bank might follow Tuesday’s emergency rate cut by the Fed. Bailey said any BoE measures would be best done in tandem with Britain’s government.
On Tuesday, the dollar index slipped as low as 96.926. The greenback index measures the strength of the greenback against a basket of six other major currencies. It is the weakest indicator since January 8.
The money market in the eurozone is pricing a chance of 90% that the European Central Bank will cut its deposit rate, now minus 0.50%, by ten basis points next week.
Jonathan Coughrtey is managing director at Action Economics. He said in a note that the dollar found its feet after a phase of underperformance against the major currencies and euro.
Upbeat data is supporting the dollar.
The United States private payrolls increased more than forecasted in February.
This is the leading news of the market for now.
