EUR/USD: Coronavirus now hits the dollar
Italy’s decision to close down school weighed on the common currency and capped its gains. Speculation about an ECB cut and further virus headlines are set to rock markets, in the opinion of Y0hay Elam from FXStreet.
“No school today. Italy took the drastic step after the death toll from coronavirus surpassed 100. The number of infections has hit 3,000 and also other European countries have seen an increase in cases.”
“The Federal Reserve is on course to continue cutting interest rates while the European Central Bank has limited space. While bond markets are pricing in a 10bp rate cut by the Frankfurt-based institution next week, in Washington, at least 40bp of cuts are projected for the March 18 decision.”
“Another factor to watch is US politics. The greenback jumped on Joe Biden's victory in Super Tuesday. Moreover, Biden received the support of businessman Michael Bloomberg who stepped down on Wednesday.”
“US Factory Orders are of interest today, but it seems that only top-tier events can compete with virus updates. Friday's Non-Farm Payrolls release is one such event, and it could move markets – as it impacts the Fed.”