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The dollar fell sharply against the yen and euro as U.S. Treasury yields dropped to record lows on coronavirus fears. Markets priced in a second 50 basis point Fed rate cut that month.
The move erased the dollar's main carry advantage, and the euro gained 1.9% for the week.
A weaker dollar and the loss of its carry advantage can reverse a dollar uptrend that began in mid-2018. A softer dollar typically supports dollar-priced commodities such as grains and oilseeds.
financialpost.comReutersMar 5, 2020After 1,637 past bearish macro events, US Dollar (Broad) moved a median -0.2% over 5 sessions (39% higher; middle half -0.6% to +0.3%), and -0.2% over 20.
After 388 past bullish macro events, Euro (USD per EUR) moved a median +0.3% over 5 sessions (62% higher; middle half -0.4% to +1.1%), and +0.1% over 20.
Not enough comparable past events yet for a historical read.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Record-low US Treasury yields and pricing of a 50bp Fed cut erased the dollar's carry advantage, directly driving EUR/USD higher within the window (euro +1.9% for the week).
