DXY tumbles by 0.40% following the address from Pres Trump

• DXY drops following US Pres. Trump's address to the nation.
• Trump said that the US will suspend all travel from Europe to the US for next 30 days effective Friday at midnight.
• Trump said this is not a financial crisis, although markets sense otherwise. 

The US dollar is in free fall, as are commodity currencies while the CHF and yen catch a bid across the board following the US President's address to the nation in response to the COVID-19 pandemic being termed so by the World Health Organisation. At the time of writing, DXY is trading at 96.16 having travelled between a high of 96.66 and a low of 96.14. 

The World Health Organization has declared the worldwide outbreak of the new coronavirus a pandemic, with more than 118,000 cases in 114 countries and 4,291 deaths. "We have called every day for countries to take urgent and aggressive action. We have rung the alarm bell loud and clear," WHO chief Tedros Adhanom Ghebreyesus said on Wednesday. 

In response, US markets plummeted with the DJIA closing in bearish territory for the first time in a decade. The Dow DJIA fell following a powerful decline of 18% in shares of component Boeing Co. BA, -18.15%, sending the price-weighted index into a bear market. the Dow plunged 1,464.94 points, or 5.9%, to settle at 23,553.22. The S&P 500  and the Nasdaq Composite Index entered bearish territory but managed to bounce from those levels narrowly missed ending at the lows of the day. 

Trump addresses the nation

• Says US will suspend all travel from Europe to the US for next 30 days effective Friday at midnight.
• Says travel restrictions will not apply to the UK.
• Says recommending nursing homes to suspend all unnecessary visits.
• Says he will take emergency action to provide financial relief for workers who are ill, quarantined or caring for others due to coronavirus.
• Says this is not a financial crisis.
• Says instructing small business administration to provide capital and liquidity to firms affected by the coronavirus, provide low-interest loans.
• Says he is instructing treasury department to defer tax payments without interest or penalties for certain businesses, individuals impacted by the coronavirus.

Focus now on ECB

Meanwhile, EUR/USD is stabilising ahead of the European Central Bank which is expected to announce measures to support growth. The Bank of England cut rates by 50bps overnight, and the ECB looks likely to follow, which could give the euro bulls a hard time. "A 10bp rate cut still stands, as it would be a signal that the ECB is willing to do everything within its mandate. It would also strengthen the impact of other policy measures. Whilst we think that a 20bp cut would smack of panic, refraining from a cut altogether would surprise the market negatively," analysts at Rabobank argued. 

DXY levels