Global markets traded in a cautious tone yesterday with the US dollar continuing to be on offer across the board. Stock indices trod water for most of the day, coming under pressure late in the session following new developments around yesterday’s vaccine headlines. Moderna Therapeutics was criticised by the scientific community for basing their claims on an apparently inadequate amount of data.
Even though global stock markets snapped a 3-day winning streak, this did not create any demand for the buck. Across the day, the greenback was sold against most of the majors apart from the Japanese yen. The Kiwi dollar displayed the most impressive rally and is a currency that has seen robust demand of late just as their nation begins to get back to normality.
Yesterday saw the Fed Chairman virtually testify to a Senate Banking Committee. Mr. Powell attempted to remain neutral on the subject of whether Congress should provide more stimulus. This comes as the Democrats are pushing for another $3 trillion package to support the economy. The Fed Chair provided the same rhetoric that the central bank will do what is needed of it and they have not yet used all the tools available to them.
Today is a busy day on the economic calendar. Across the morning and early afternoon session, we will see inflation (consumer price index) readings from the UK, eurozone, and Canada. The evening provides the main event of the day which is the Federal Reserve meeting minutes from their last gathering in April. These will be released at 7 pm.
Written by Viv Savani. 8:43am, May 20th 2020
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