Forex Today: Gold up, stocks stall as G7 struggles to agree coronavirus response on Super Tuesday
Here is what you need to know on Tuesday, March 3:
Coordinated coronavirus response: G7 central bankers and finance ministers will hold an emergency call to discuss a coordinated response to the coronavirus crisis at 12:00 GMT. Recent reports suggest disagreements have emerged, triggering a halt in stocks' recovery, gold to bounce, and the safe-haven yen to find demand.
It is unclear if policymakers will issue a communique. Equities rallied on Monday in response to the announcement of the call and the participation of central bankers after tumbling down last week. The European Central Bank was the last major institution to issue a special statement offering action but that did not stop EUR/USD which is holding its ground above 1.11.
The dollar dropped on growing expectations for the Federal Reserve to slash rates, perhaps by 50 basis points and ahead of the March 18 meeting.
AUD/USD is on the rise after the Reserve Bank of Australia cut interest rates by 25 basis points early on Tuesday and not by 50bp that some had expected. The Aussie overcame disappointing Building Approvals and Current Account figures in Australia.
Coronavirus latest: The number of US deaths climbed to six, all around Redmond, in Washington state – which declared a state of emergency. Nevertheless, Vice President Mike Pence said the risk for the American public is low. The number of global infections and deaths continues rising. Italy, South Korea, Iran, and China – which reported horrible economic figures – are the worst-hit countries. More companies cancel travels and call employees to work from home.
Brexit: The EU and the UK kicked off Brexit talks but tackling the virus consumed the agenda on both sides of the Channel. GBP/USD struggled more with the Bank of England's commitment to act in response to the disease.
Eurozone Consumer Price Index figures are eyed later today with core inflation forecast to edge up to 1.2%.
See Eurozone inflation preview: Small miss may trigger more ECB stimulus, accelerate EUR/USD correction
US ISM Manufacturing Purchasing Managers' Index data disappointed with 50.1 points, representing minimal expansion in the industrial sector. The effect of the health crisis is not fully reflected in the survey.
US politics: Today is Super Tuesday where a third of the delegates in the Democratic Party are up for grabs via primaries in 14 states, including California and Texas. Former Vice President Joe Biden is gaining momentum after his win in South Carolina and as former rivals and fellow centrists, Amy Klobuchar and Pete Buttigieg suspended their campaigns and backed him. Left-leaning senator Bernie Sanders is Biden's main rival, with like-minded senator Elisabeth Warren and businessman Michael Bloomberg also in the lead.
See Super Tuesday preview: It’s all about the delegates
Cryptocurrencies are consolidating gains with Bitcoin trading just shy of $9,000.