The Kiwi also bounced-off 250-pips from 0.6029, while the USD/CAD rallied to 1.3758. The USD/CHF pair fell to over a two-year low of 0.9192, as risk-aversion boosts the safe-haven Swiss franc. The cable was the least affected by Asian volatility, as it failed to survive above the 1.3100 level. Gold is in good shape.
USD/JPY saw a big crash to a near multi-year low of 101.59 but quickly reversed to around 102.80 regions, within the currency markets. AUD/USD was downed to 0.6320 and then rebounded to about 0.6550. EUR/USD almost tested 1.15 handles. The rest of the major currencies also witnessed massive moves.
The United States dollar index bore the brunt of the rout in the Treasury yields and increased odds of a 75bps March Federal Reserve rate cut, despite the broad risk-aversion. Gold prices reached a new seven-year high at 1703.40 but swiftly corrected back to the 1600 level.
Since February 2016, the WTI fell below $28 mark and hit the lowest at $27.34 while Brent tested the $31 mark. The risk-off flows in the United States bonds led to over 30% collapse in the United States Treasury yields, with the entire yields curve having dropped under the 1% level. The United States equity futures crashed 5% alongside, halting trade.
To deepen production by an additional 1.5m BPD (barrels per day), Russia rejected OPEC’s proposal until the end of the year. Of course, it aggravated the economic uncertainty already persisting due to the virus outbreak.
By the rapidly spreading coronavirus in Europe and oil-price plunge, the Asian markets were ravaged. It triggered a massive flight to safety in gold, the United States, and the Japanese yen. While the Japanese benchmark, the Nikkei 225 dived over 6%, the Australian equities lost 7%.
It is current news for today. We can see that there are some movements in the major currencies. The coronavirus is spreading rapidly in Europe; thus, the global economy suffers.