Let’s check the international foreign market. By the rapidly spreading the coronavirus in Europe and oil-price plunge, the Asian markets were ravaged. It triggered a massive flight to safety in Japanese yen, gold, and the United States. The Australian equities lost 7%, while the Japanese benchmark, the Nikkei 225 dived over 6%.
Russia rejected OPEC’s proposal to deepen production by an additional 1.5m BPD (barrels per day) untiled the end of the year. It aggravated the economic uncertainty already persisting due to the virus outbreak.
Since February 2016, WTI fell below $28 mark and hit the lowest at $27.34 while Brent tested the $31 mark. With the entire yields curve having dropped under the 1% level, the risk-off flows in the United States bonds led to over 30% collapse in the United States Treasury yields. The United States equity futures crashed 5% alongside, and trading halted.
The United States
Despite the broad risk-aversion, 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. On the other hand, Gold prices reached a new seven-year high at 1703.40 but swiftly corrected back to the 1600 level.
USD/JPY saw a flash crash to a new 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 majors also witnessed massive moves.
The USD/CAD rallied to 1.3758, while the Kiwi also bounced-off 250-pips from 0.6029. As risk-aversion boosts the safe-haven Swiss franc, the USD/CHF pair fell to over a two-year low of 0.9192. As it failed to survive above the 1.3100 level, the cable was the least affected by Asian volatility.
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.