Kiwi outpaces major counterparts to test key resistance handles

Key Movers

The US dollar fell for a third straight session, succumbing to improvements in risk demand and a commitment to uber loose monetary policy conditions from the Federal Reserve. Reports government trials of Remdesivir have proffered promising results helped bolster demand for commodity led and emerging market currencies, while traditional safe havens were forced lower, under-performing against most major counterparts. The Dollar index slipped back below 100, losing three tenths of one percent and testing two week lows at 99.44.
Having touched a 3 year high in March the dollar has slowly edged lower marking a series of lower lows and lower highs as confidence across financial markets grows and risk demand improves. Attentions are starting to turn away from the virus itself with risk demand driven by the prospect of the global economy opening sooner rather than later. With the US still heavily entrenched in a battle against the coronavirus and the Federal reserve committing to a program of uber loose monetary policy measures the attractiveness of the worlds base currency is beginning to falter. That said, there are still a vast number of uncertainties that cloud forward guidance and the current risk on run is certainly vulnerable to a swift reversal. As long as the virus remains prevalent the USD will find risk based support.
Attentions today turn to the ECB and its monthly policy meeting. With no major policy announcement expected attentions still remain with EU leaders and the promise of a detailed coronavirus rescue plan. Until specifics are released we expect the Euro will remain vulnerable to further downside.