FOREX
The ECB’s updated forecasts imply that, at best, growth slowly returns to trend over the next few years, meaning it will be very difficult to get underlying inflation up.
The euro cowered at $1.1190, having suffered its biggest one-day loss against the dollar since June 14, 2018 when the ECB last pushed back plans for a rate hike.
The U.S. dollar rose to three-month highs against its rivals on Thursday amid a slump in the euro after the European Central Bank.
The greenback reached a new 2019 high against a basket of currencies and was last at 97.607.
The euro also shed over 1% on the yen overnight and was last trading at 124.88 yen. The Japanese currency was one of the few to hold its own on the dollar at 111.60.
The People's Bank of China set the yuan reference rate at 6.7235 vs the previous day's fix of 6.7110.
Argentina's struggling currency hit a record low against the dollar on Thursday, weakening over 4 percent to close at 42.5 pesos per dollar, a challenge for President Mauricio Macri as he looks to right the economy ahead of elections in October.
ECONOMY
On Friday , Asian Indices shuddered lower after the European Central Bank slashed its growth forecasts and launched an emergency round of policy stimulus, leaving investors fearing the worst for the global economy.
Our initial take is these developments are pressing down on market confidence, seen in lower bond yields and equities.
ECB President Mario Draghi on Thursday said the economy was in “a period of continued weakness and pervasive uncertainty” as he pushed out a planned rate hike and instead offered banks a new round of cheap loans.
The reversal came in the same week that Canada’s central bank took a sudden dovish turn and dismal data from Australia to the UK instilled a sense of foreboding in markets.
When central banks surprise like this some investors wonder whether that infers things are much worse than they thought.
Yields on German and French 10-year bonds dived to their lowest since 2016, while banking stocks took a beating. The euro duly sank to depths last seen in mid-2017, sending the safe-haven U.S. dollar and yen surging.
Overnight the Dow fell 0.78%, while the S&P 500 lost 0.81% and the Nasdaq 1.13%. The closely watched Dow Jones Transport Average fell for a 10th straight session, the longest streak since February 2009.
COMMODITY
The rise in the dollar pressured gold prices, which slipped to $1,285.61 per ounce.
Oil prices eased in early trade, but found some support from OPEC-led supply cuts and U.S. sanctions against exporters Venezuela and Iran. U.S. crude was last down 25 cents at $56.41 a barrel, while Brent crude had yet to trade at $65.90.
Chinese state-owned firms bought at least 500,000 tonnes of U.S. soybeans on Thursday for shipment primarily from Pacific Northwest grain export terminals from June to September, two traders with knowledge of the deals said.
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