Author : Brett Gordon
Having been the biggest G10 winners the previous day, AUD/USD extends the recovery moves to 0.5985 amid the early Australian session on Wednesday. While optimism surrounding the US COVID-19 Bill seems to favor the broad risk-on, fear concerning the coronavirus (COVID-19) outbreak in the US is likely the latest drag on the quote.
.US Senators were finally able to reach a fiscal stimulus deal yesterday that will inject $2 trillion into the economy and will formally vote on it later today. The package includes a combination of spending and tax relief measures, including $500 billion in spending loan guarantees, $350 billion for small business support, and $1200 payments to individuals below a certain income threshold. The announcement of the deal, along with the extraordinary stimulus measures implemented by the Federal Reserve, has had the initial effect of weakening the US dollar and boosting risk assets. However, the market still seems unconvinced, with equities and equity futures giving back nearly all their gains since the post-deal surge.
Tonight sees the release of US GDP numbers for Q4, although will be largely irrelevant given the Covid-19 situation. Of far more interest will be jobless claims figures for the week ending March 21. The Bank of England meets tonight, but has already made 2 emergency cuts to its base rate, to an historic low of 0.1%.
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