The prospect of even more monetary easing and very low United States yields held back gains in the dollar. Nevertheless, in Asian trading, big data showed United States services activity at one-year high had pushed the greenback higher against the euro.
The dollar held firmer also because of the strong performance of former Vice President Joe Biden in the Democratic nomination campaign. Biden is considered less likely to impose new regulations on business and raise taxes than rival Bernie Sanders.
The great concern about the widening fallout from the coronavirus outbreak weighed more firmly on the main currencies and the dollar. On Thursday, mainland China reported a rise in new infections. California has declared a state of emergency as cases there increase. Italy had closed its school, and deaths are mounting globally.
Canadian Dollar and the United States
The Canadian dollar was down 0.22% against the greenback at 1.3407 and followed suit from its United States counterpart. It happened the aftermath of Bank of Canada joining the Federal Reserve in cutting interest rates by 50 bps. That is the most significant cut in 10 years. It left the door open to further easing.
On the loonie also pressure has falling oil prices.
Leaving rates unchanged for now, the Bank of England has refused for now to give in to the pressure. As a result, Sterling hit a six-day high of $1.2903 and a three-day high versus the euro of 86.22 pence.
However, markets of the money are pricing in a full 25 bps rate cut on March 26, incoming governor Andrew Bailey’s first policy meeting.
Later in the day, traders will be watching factory orders and jobless claims in the United States. Forecasts show that both data sets to be weaker.
From the current 1% to 1.25% percent range, money markets were pricing in another 25bps cut at the next federal reserve meeting on March 18-19 and a 50-bps cut by April.