The US currency Is in the Red. Demand for Risky Assets Has Increased

The US dollar has been declining against a basket of currency majors amid growing demand for risky assets. The US dollar index (#DX) closed in the negative zone (-0.75%). Investor sentiment has improved significantly after Moderna Therapeutics, a US biotechnology company, reported positive test results for the COVID-19 vaccine. 45 participants were vaccinated, as a result all had developed antibodies against the virus.

Meanwhile, the Australian and New Zealand dollars have been growing after the Chinese President said that Beijing had done everything possible to provide information about the crisis. It should be recalled that the United States previously accused China of concealing the fact of the danger of the COVID-19 virus. In addition, China intends to allocate $2 billion to countries affected by coronavirus in the next two years.

The single currency has been growing amid news that Chancellor of Germany, Angela Merkel, and President of France, Emmanuel Macron, proposed creating a €500bn EU rescue fund, aimed at rebuilding the economies of the countries most affected by the coronavirus pandemic. They are also considering giving the European Commission the right to borrow money on behalf of the EU, which will take them one step closer to Eurobonds.

Japan may face the largest post-war economic downturn, according to a government report. It is reported that GDP began to fall even before the pandemic: from January to March, it fell by 0.9% compared to the previous quarter. A further fall due to coronavirus is inevitable. In the second quarter, GDP is expected to decline by 12% compared to the beginning of the year, and on an annualized basis this figure may reach 22%.

The "black gold" prices are rising. Currently, futures for the WTI crude oil are testing the $32.10 mark per barrel. At 23:30, API weekly crude stock will be published.

Market indicators

Yesterday, there was the bullish sentiment in the US stock market: #SPY (+3.05%), #DIA (+3.81%), #QQQ (+1.86%).

The 10-year US government bonds yield has increased. At the moment, the indicator is at the level of 0.72-0.73%.

• - UK labor market data at 09:00 (GMT+3:00);
  - German ZEW economic sentiment index at 12:00 (GMT+3:00);
  - Statistics on the US real estate market at 15:30 (GMT+3:00).

by JustMarkets, 2020.05.19

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.