Daily thread to exchange ideas and to share your thoughts
Happy Friday, everyone! Hope you're all doing well as we get things going in the session ahead. It's been a calmer start to the day, and by that I mean the market is not behaving so disorderly as the dollar rampage takes a breather - for now at least.
Equities are also keeping a calmer tone with US futures erasing earlier losses as central bank action over the past week is helping to stop the carnage for the time being.
On the week though, it is still all about the dollar and while investors may find some reprieve today, we still have many more weeks of volatile and turmoil to navigate through.
Despite the retracement today, the dollar is comfortably leading the way this week:
Notably, USD/JPY is back up to 110.00, EUR/USD is down to levels last seen in 2017, GBP/USD is down to lows since 1985, and AUD/USD is down to lows since 2002-03.
I reckon central bank action - particularly the Fed swap lines - will help to contain the financial dislocation as we have seen over the past two days. However, containing it and reversing it are two very different things.
And as long as the global lockdown continues to take a toll on the world economy, it is hard to see how central bank action will help to turn things around dramatically.
But the good news is that they are at least stepping up big time to address the financial dislocation and that will help to ease fears among businesses and households - for now at least - until the next one comes along.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.