Dollar Climbs On Hopes Of U.S. Stimulus Package
March 13 2020 - 06:07AM
RTTF2
The U.S. dollar strengthened against its major counterparts in
the European session on Friday, as expectations of U.S. stimulus
package helped soothe fears about the economic fallout from the
coronavirus crisis.
House Speaker Nancy Pelos indicated that U.S. lawmakers and the
White House could agree on a stimulus package today.
China cut its reserve requirement ratio for the second time this
year, releasing 550 billion yuan in liquidity.
European stocks recovered from their huge sell-off on Thursday.
Stimulus from the European Central Bank and a U.S. travel ban to
prevent the outbreak's spread failed to calm market fears.
Data from the Labor Department showed a decrease in U.S. import
prices in the month of February.
The Labor Department said import prices fell by 0.5 percent in
February after inching up by a revised 0.1 percent in January.
The greenback appreciated to 1.2456 against the pound, its
biggest since October 11. The greenback is seen finding resistance
around the 1.22 mark.
The greenback edged higher to 1.1103 against the euro, from a
low of 1.1221 seen at 12:45 am ET. Next key resistance for the
greenback is likely seen around the 1.10 level.
Final data from Destatis showed that Germany's consumer prices
increased a steady pace in February.
Consumer price inflation remained unchanged at 1.7 percent in
February. This was in line with the estimate published on February
28.
Extending early rally, the greenback moved up to an 8-day high
of 107.50 against the yen. The greenback is likely to face
resistance around the 109.00 region, if it gains again.
The Bank of Japan said it will provide ample liquidity and
ensure stability in the financial markets amid high volatility
triggered by coronavirus outbreak fears.
Taking into account the rapid fall in liquidity in the bond
market, the BoJ conducted unscheduled outright purchase of Japanese
government bonds, or JGBs, on Friday. The bank said it will conduct
additional outright purchases as needed.
The greenback was up at 0.9555 against the franc, an 8-day high.
Should the greenback strengthens further, it is likely to test
resistance around the 0.97 region.
The greenback was trading on a positive note versus the kiwi, at
0.6147. Further rally may test resistance around the 0.60 area.
In contrast, the greenback fell against the loonie and was
trading at 1.3865. Immediate support is seen near the 1.37
level.
The greenback held steady against the aussie, after having
recovered from a low of 0.6325 seen in the previous session. The
pair had finished yesterday's deals at 0.6235.
The University of Michigan's consumer sentiment index for March
is due at 10:00 am ET.
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