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The Greenback Finds Early Support ahead of Today’s FOMC Meeting Minutes

Bob Mason

Earlier in the Day:

It was a relatively quiet start to the day on the economic calendar on Wednesday. The Japanese Yen was in action in the early hours.

Outside of the numbers, the markets also continued to respond to the latest coronavirus numbers. Following the lower number of new cases on Monday, new cases were on the rise once more on Tuesday. Fatalities also continued to rise, weighing on risk appetite.

On Tuesday, the total number of coronavirus cases across France, Germany, Italy and Spain rose by 23,653 to 494,260. In the U.S, the total number of cases increased by 32,950 to 400,335. That took the total number of cases globally to 1,431,054.

Key take away from the numbers was 3,039 new cases in Italy, which was up from the 901 new cases on Monday. France also reported another spike, with 11,059 cases, which was up from 5,171 new cases on Monday.

For the Japanese Yen

Core machinery orders rose by 2.3% in February, month-on-month, coming in ahead of a forecasted 2.7% decline. In January, orders had risen by 2.9%. Year-on-year, orders fell by 2.4%, following a 0.3% decline in January. Economists had forecast a 2.9% fall.

The Japanese Yen moved from ¥108.707 to ¥108.577 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.01% to ¥108.77 against the U.S Dollar.

Elsewhere

At the time of writing, the Aussie Dollar was down by 0.57% to $0.6135, with the Kiwi Dollar down by 0.44% to $0.5951. While the Aussie Dollar gave up some of Tuesday’s RBA fueled gains, central bank policy weighed on the Kiwi Dollar.

Early this morning, RBNZ Assistant Gov. Hawkesby stated that they remained ready to adjust the size of the QE program as and when deemed appropriate. He also added that the OCR could be cut into negative territory at some point in the future.

The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic calendar, with no material stats due out of the Eurozone to provide direction.

The lack of stats will leave the EUR in the hands of the coronavirus numbers and sentiment towards the economic outlook.

Based on the latest figures and March stats out of the Eurozone, both remain EUR negative.

At the time of writing, the EUR was down by 0.24% at $1.0866.

For the Pound

It’s also a quiet day ahead on the economic calendar. There are no material stats due out ahead of tomorrow’s data deluge, which will leave the Pound in the hands of the news wires.

The markets will be in search of updates on the British PM’s health, with Foreign Secretary Dominic Raab considered negative for the Pound. Standing in for Johnson, there are concerns that the Foreign Secretary may rein in fiscal policy support at a time when the coronavirus peak has yet to come.

At the time of writing, the Pound was down by 0.11% to $1.2318.

Across the Pond

It’s a relatively quiet day ahead on the U.S economic calendar, with FOMC meeting minutes in focus late in the session.

The markets will be looking for any forward guidance on policy and the economic outlook. We’ve seen the FED throw in the kitchen sink, which leaves the question of what ammunition they have left. Further support may well be needed should the lockdown extend into May…

The Dollar Spot Index was up by 0.21% to 100.114 at the time of writing.

For the Loonie

It’s a busier day ahead on the economic calendar, with housing sector numbers in focus later this afternoon.

March housing start numbers will garner some attention, with the spread of the coronavirus likely to hit the housing sector. February building permits, however, will likely have a muted impact on the day.

Outside of the numbers, risk sentiment will provide direction on the day ahead of tomorrow’s OPEC Plus meeting.

The Loonie was down by 0.26% at C$1.4030 against the U.S Dollar, at the time of writing.

This article was originally posted on FX Empire

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