Commodity Currencies Find Early Support, with Inflation Figures Putting the GBP and Loonie in Focus

Earlier in the Day:

It was a particularly quiet start to the day on the economic calendar this morning, with no material stats to provide direction.

The lack of stats left the Asian markets to take their cues from the U.S session overnight, Tuesday’s COVID-19 numbers, and crude oil prices this morning.

On Tuesday, the number of new coronavirus cases increased by 75,450 to 2,556,476. On Monday, the total number of new cases had risen by 73,685 to 2,481,026. With the number of new cases on the rise once more, the devil was in the details.

Across France, Germany, Italy, and Spain, the total number of new cases rose by 10,752, which was up from 7,604 on Monday. A downward trend was reported from the U.S, however. New cases increased by 25,985 on Tuesday, following 28,494 new cases on Monday.

The Key take away from the numbers was the marginal pickup across the 4 EU member states. Compared with last week, the downward trend continued, supporting the plans to ease lockdown measures.

With the COVID-19 numbers largely positive, a pickup in crude oil prices provided early support to the commodity currencies.

For the Majors

At the time of writing, the Aussie Dollar was up by 0.56% to $0.6315, with the Kiwi Dollar was up by 0.27% to $0.5974. The Japanese Yen was up by 0.04% to ¥107.76 against the U.S Dollar,

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. Economic data is limited to flash Eurozone consumer confidence figures for April.

The markets are prepped for another slide in consumer confidence, with the EU wide lockdown driving unemployment. It would be a surprise for consumers to be able to look past the current economic environment…

Outside of the numbers, market reaction to the latest COVID-19 numbers and plans to ease lockdown measures will remain in focus.

For now, COVID-19 stricken member states and beyond are currently left with the €590bn rescue package. It’s not enough… This week, we are expecting more chatter and attempts to crank up the quantum. With Germany starting to ease lockdown measures, however, chances of something significantly remain slim at best.

At the time of writing, the EUR was down by 0.04% to $1.0854.

For the Pound

It’s a relatively busy day ahead on the economic calendar. March inflation figures are due out that will have limited to no impact on the Pound.

Deflationary pressures have accelerated, so the markets are not expecting any pickup in inflationary pressures. Sliding oil prices are certainly going to pressure the numbers in April, which will also limit the effect of today’s numbers.

Of greater significance on the Pound will be chatter from Parliament and the latest COVID-19 numbers. With EU member states starting to ease lockdown measures, the markets will be looking towards the UK government and updates on containment measures.

Looking at the COVID-19 numbers, the UK lockdown looks set for an extension beyond the end of April, which remains Sterling negative.

At the time of writing, the Pound was up by 0.02% to $1.2291.

Across the Pond

It’s a particularly quiet day ahead on the U.S economic calendar, with no material stats due out of the U.S to provide direction.

The lack of stats leaves the Dollar firmly in the hands of market risk sentiment and chatter from Capitol Hill.

While Trump is unlikely to be too market-friendly, the Dollar remains the favored safe haven…

The Dollar Spot Index was down by 0.03% to 100.226 at the time of writing.

For the Loonie

It’s a busy day on the economic calendar, with March’s new house price and inflation figures due out later today.

Don’t expect any influence from the numbers, however… The markets are expecting the real estate market to suffer at the hands of COVID-19. Deflationary pressures have also surged as a result of the slump in crude oil prices.

Expect updates on COVID-19 and any plans to ease lockdown measures to influence… It will ultimately come down to the direction of crude oil prices, however. The weekly inventory numbers will provide direction later today.

The Loonie was up by 0.14% to C$1.4191 against the U.S Dollar, at the time of writing.