11.03.2020: Investors betting on another Fed’s emergency key rate cut: outlook for USD/JPY, AUD/USD

Today market participants are mulling over an emergency interest rate cut by the Bank of England. Besides, they are anticipating another key rate cut by the Fed next week.
Meanwhile, US Treasury bond yields are still in the red. It is indicating the risk-off sentiment in the market and high expectations of another key rate cut by the Federal Reserve. During yesterday's press conference on economic measures in response to the coronavirus, Donald Trump renewed his call for lower interest rates, pressing the central bank to cut short-term rates to zero.
Yesterday the US dollar index rose above the 96.00 level but it was unable to develop a further rally amid the mixed economic background. Today the greenback is hovering in the range of 95.90-96.20.
At the same time, the dollar/yen pair is attempting to move upwards. During the Asian session, it added 100 pips, up to 105.20 from 104.20. Yesterday the pair gained 300 pips. The Nikkei index fell by 1.15%. Currently, Japan’s economy is facing a recession. On top of this, the country is on the verge of a coronavirus epidemic. There were 1,277 confirmed cases of the infection and the death toll reached 19. The Prime Minister was given the power to declare a state of emergency. If the dollar/yen pair breaks above yesterday's high, it is likely to climb to 107.13.
The AUD/USD pair moved down as expected. However, it did not reach the 0.6440 level as we forecast yesterday. It reversed near 0.6470 climbing to the level of 0.6530. Despite its recent increase, the resumption of the downward movement is still in the cards. So, the pair is highly likely to decline to 0.6440.
It seems that the pair’s short-term rise was due to the speech of the Prime Minister of Australia. He announced the government's preparation for a multi-billion dollar stimulus package in anticipation of an outbreak of coronavirus in Australia.
That’s all for now. We wish you profitable deals! See you on our channel with a new video in a couple of hours!

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