Dollar Remains King; US Stocks Look to Rebound
FEBRUARY 26, 2020
The coronavirus continues to dominate global headlines and the risk-off environment has been a boost for the safe-haven U.S. dollar.
U.S. equities lost another 3.0% of value yesterday, following a 3.5% selloff on Monday. The Dow Industrial Average has fallen seven out of the last eight days.
Cases outside of China continue to climb prompting countries to take action to stem the spread of infection. Japan introduced a new plan yesterday and called for sporting and cultural events to be canceled. The summer Olympics in Tokyo is still “on”, according to officials.
President Trump will hold a press conference on the infection at 6 PM Eastern.
The economic and central bank docket is light with only new home sales slated for 10 AM
What to Watch Today…
- President Trump to speak on coronavirus at 6 PM
Complete Economic Calendar can be found here.
The Australian dollar continued to weaken and touched a fresh 11-year low versus the U.S. dollar. Australia is particularly vulnerable to a slowdown in China as the world’s second-largest economy is Australia’s largest trading partner. News reports are blaming last night’s move on hedge funds selling their position in the beleaguered currency, triggering stop-loss orders.
After gaining modestly yesterday, the British pound is back under pressure as the safe-haven greenback remains King. The lead up to the start of negotiations between the European Union and the United Kingdom have been rocky at best. Bloomberg reports that “British and European diplomats are already wondering aloud whether the EU is being too complacent about the U.K.’s determination to break free and are stuck still fighting the battles of the last few years when Britain was ruled by a different leader (May).” The general thinking is that Boris Johnson is taking a more aggressive approach than his predecessor.