The past few days were quite dark for the stock market, as the sell-off has worsened, with major US indices falling over 4% this Thursday and, overall, 10% from the highs. As for other important markets, they followed the same path, as a bear market and global recession seem imminent under the current conditions.
New regions are affected
With the new coronavirus Covid-19 spreading to Africa, Nigeria being the first country in the region with a confirmed case, besides South Korea, Japan, multiple countries in Europe, as well as the United States, the World Health Organization is considering declaring the virus as a pandemic in the near future.
The EUR/USD is now trading at 1.10, following the efforts of Germany’s finance minister, Olaf Scholz, to introduce a fiscal stimulus, which eventually buoyed the euro.
As for the GBP/USD pair, it has been struggling around 1.29. Prime Minister Boris Johnson presented a tough stance ahead of Great Britain’s post-Brexit talks, expected to begin this Monday. But the situation could become worse, as the UK threatened to walk away by July if significant progress won’t be made. Even more, Mark Carney, outgoing Governor of the Bank of England, believes that the economic growth of the United Kingdom will be downgraded.
Safe havens are not safe anymore
Moving on to the Japanese Yen, considered by many a safe haven, has been gaining ground. USD/JPY fell below 109, while the US ten-year yields have reached a new record low, at 1.24%. Surprisingly, gold has been unable to gain capital on the recent market slump, currently trading below $1,630.
The coronavirus also affected commodity currencies, most of them crashing. AUD/USD is getting close to 0.65, while NZD/USD also dropped below 0.6250, after a first case of coronavirus was confirmed in New Zealand.
Most investors are now refraining from important decisions, as they are looking forward to seeing next week’s first significant economic figures, related to the spreading of Covid-19.