Coronavirus Continues To Be a Concern for Forex Investors
The worry and concern surrounding the coronavirus in Europe has meant that the Asian markets have seen Japan fall beyond 3%.
There has also been a decrease in the value of oil by 30% which has been attributed to a price war launched by Saudi Arabia during the weekend. The reason behind the price war is said to be due to Russia reject OPEC’s proposal to produce an additional 1.5 million barrels per day.
This news has only gone to interject more uncertainty in the market overall, often meaning that investors are being cautious when it comes to investments.
The US Dollar Continues to Struggle as Value of Gold Increases
Despite the measures put in plan a proposed federal reduction in rates meant that the confidence in USD was lessened. However, there was an increase on gold at 1703.40, although this has since reverted to the expected 1600 level
The concerns surrounding the USD bled into its pairing with JPY as the USD/JPY saw a low of 101.59, although this did later increase to 102.80. Other pairings also saw similar movements, such as AUD/USD which decreased to 0.6320 before then increasing to 0.6550.
However, not all pairings delivered decreased lows.
EUR/USD Pairing Sees 14-Month High
Although there have been a series of ramifications due to the coronavirus, the EUR/USD pair showed an increased yield which can be attributed to the demand for treasuries following the Saudi-Russia price war and the lack of investments following the outbreak of the coronavirus.
Coronavirus Could Mean a Halted Bull Market
Although there have always been spikes in many currencies, the coronavirus could mean that prices aren’t expected to rise until a resolution has been put in place. As uncertainty continues to grow among other concerns, investments could be few and far between until more positive news is delivered concerning the coronavirus.
Italy has stated that the country is in full lockdown with the public being advised to stay indoors until more clarity about the coronavirus has been established.
European Central Bank Has Limited Leg Room
Attention is being drawn to the upcoming meeting which is to be held by The European Central Bank. Negative interest rates have already been put in place, meaning that there may be little resolve when it comes to counteracting the effects of the coronavirus.
The Bank of England has also made an emergency cut to interest rates in a bid to rejuvenate the economy, meaning that borrowing costs are the lowest they’ve ever been in history
The eurozone gross domestic product (GDP) could prove to be promising, but many have noted that information contained within the release will not factor in the recent coronavirus concerns