(27 March 2020)DAILY MARKET BRIEF 2:WTI crude consolidates a touch below $25

(27 March 2020)DAILY MARKET BRIEF 2:WTI crude consolidates a touch below $25

27 March 2020, 09:15
Jiming Huang
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WTI crude consolidates a touch below $25 a barrel and will likely gyrate within the $20-$25 area, with a greater possibility of breaking this range to the topside.

In the foreign exchange markets, the EURUSD rallied to 1.1086 on a broadly softer US dollar. An improved risk sentiment and a further haven outflows from the US dollar could pave the way for a further euro recovery toward the 1.12 mark.

Cable extended gains to 1.23, but anxieties that the UK will have to deal with the coronavirus crisis alone should cap the upside in Sterling near the 1.25 handle against the greenback. At its Thursday monetary policy meeting, the Bank of England (BoE) warned about the long-term damages to the economy with companies running out of fuel and widespread job losses across the country. The bank said it “stands ready to respond further as necessary to guard against an unwarranted tightening in financial conditions, and support the economy” after having already lowered interest rates twice this month to the historical low of 0.10% and expanded its asset purchases program by 200 billion pounds.

Elsewhere, the Reserve Bank of India (RBI) lowered its benchmark rate by 75 basis points to 4.40% and its reverse repo rate to 4.15% in an emergency move. The USDINR rebounded from 74.30 and is preparing to close the week above the 75 mark. However, with carry traders having already quit the market, the lower rates should not have an additional negative impact on the rupee. Right now, it is all about the fglobal risk sentiment. An improved mood should slow down the rupee's appreciation despite lower interest rates.


By Ipek Ozkardeskaya

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