December 05, 2020

Corona virus update for 04 June 2020

The dollar strengthened on Thursday, reversing its weakening trend of the past seven days, while the euro slipped ahead of a European Central Bank meeting at which policymakers could step up stimulus measures.

Sterling fell on Thursday as Britain and the European Union (EU) continued their Brexit negotiations, before the late June deadline by which the United Kingdom needs to say whether it wants an extension of the transition period.

Sterling will lose recent gains against the dollar and weaken further if Britain does not ask for an extension to its Brexit transition period by a June 30 deadline to allow more time for talks on a trade deal with the EU, a Reuters poll found.

A fading of the U.S. dollar’s allure will continue as global funding strains ease, but a majority of analysts polled by Reuters said there was a high risk that the U.S.-China trade standoff will renew safe-haven bets in the next six months.

The U.S. dollar fell to an 11-week low against a basket of other currencies on Wednesday, on optimism that the worst of the economic downturn stemming from the global spread of the coronavirus is over.

Covid-19 virus and forex trading update 06 May 2020

LONDON (Reuters) - The pound fell as much as 0.7% against the dollar on Wednesday morning before construction PMI data for April, which was worse than expected.

NEW YORK (Reuters) - The safe-haven yen and dollar rose on Wednesday, as investors sought refuge in these currencies in the wake of dire global economic numbers.

Corona virus and forex trading update 23 April 2020

LONDON (Reuters) - The dollar slipped against the currencies of oil-producing states on Thursday, giving up earlier gains as a bounce in crude prices gave succour to markets shaken by the massive coronavirus - induced drop in demand.

LONDON (Reuters) - The pound strengthened on Thursday even after dire UK preliminary PMI readings for April fell far below even the most pessimistic forecasts, as market activity appears immune to new data about the disastrous economic fallout from the coronavirus.

LONDON (Reuters) - Shoved aside by the coronavirus pandemic, Brexit is set to work its way into the headlines again as a June deadline for extending Britain’s 11-month transition period turns currency traders’ focus - and selling pressure - back to the pound.

Covid-19 virus and forex trading update 22 April 2020

 Sterling recovered on Wednesday, as some traders bought back a currency that had slipped to a two-week low the day before during a flight to financial safe havens after oil prices crashed.

LONDON (Reuters) - Shoved aside by the coronavirus pandemic, Brexit is set to work its way into the headlines again as a June deadline for extending Britain’s 11-month transition period turns currency traders’ focus - and selling pressure - back to the pound.

LONDON (Reuters) - The dollar and yen remained strong in early London trading on Wednesday after oil prices recovered from another slump, keeping demand for safe-haven currencies strong even as markets began to stabilise.

NEW YORK (Reuters) - The U.S. dollar rose to a two-week high against a basket of currencies on Tuesday as investors fled riskier assets amid a slump in oil prices that sapped demand

Latest updates for 16 April 2020

LONDON (Reuters) - The pound steadied on Thursday, slipping slightly against the dollar but holding firm against the euro, ahead of an expected announcement about an extension of Britain’s lockdown imposed to curb the spread of coronavirus.

TOKYO (Reuters) - A flight to safety bid pushed the dollar higher against its peers on Thursday after dire retail and factory data showed the severity of the collapse in U.S. economic activity caused by the novel coronavirus outbreak.

NEW YORK (Reuters) - Investors fled riskier assets for safe-havens like the American dollar on Wednesday after U.S. data underlined fears that damage to the global economy from the coronavirus outbreak will be long and protracted.

Corona virus and forex trading update 07 April 2020

The dollar fell against the yen on Tuesday as underlying concerns about the economic shock wrought by the coronavirus crisis kept many investors on edge.

Sterling dropped against the dollar and the euro on Monday after it was reported that British Prime Minister Boris Johnson has been moved into intensive care after his coronavirus symptoms worsened.

Update 01 April 2020

NEW YORK (Reuters) - The dollar fell against a basket of major currencies on Tuesday modestly pressured by the weight of Federal Reserve measures meant to ensure there was enough liquidity in the global financial system.

Corona virus and forex trading update 30 March 2020

- The United Kingdom has been placed on Lockdown, effective immediately and enforced by police departments nationwide. The lockdown is expected to last for a minimum of 3 weeks, with restrictions on travel beyond shopping for essentials, daily exercise, and work that cannot be completed from home.

- The United States Federal Reserve has adopted 'open-ended quantitative easing' in an attempt to safeguard US debt, and provide investors with a much-needed safety cushion. While the immediate effect is pulling the dollar down, the hope is that in the long-term it will successfully keep the dollar healthy.

- Italy, having been the European country hit hardest by the Coronavirus epidemic, has shown the starting signs of recovery as the number of new cases drops for the second consecutive day. The German government has signed off on a €750 billion economic package to combat the epidemic, and has stated its willingness to rescue Italy.

Dollar posts biggest weekly fall since 2009

NEW YORK (Reuters) - The dollar posted its biggest weekly decline in more than a decade on Friday, as trillions of dollars worth of stimulus efforts by governments and central banks helped temper a rout in global markets driven by the coronavirus pandemic.

The dollar surged in March as tumbling stock and debt markets caused a scramble for the world’s most liquid currency.

But big government spending pledges and coordinated efforts by central banks around the world to increase the supply of dollars have supported a rally in other major currencies.

The U.S. House of Representatives on Friday approved a $2.2 trillion aid package - the largest in American history - to help people and businesses cope with the economic downturn inflicted by the coronavirus outbreak.

The dollar dipped 0.87% against a basket of currencies Friday to 98.41. It fell 3.90% this week - its biggest weekly decline since March 2009.

The dollar index last week had racked up its biggest weekly gain since the financial crisis.

EU pushes Britain to extend Brexit talks over virus outbreak

The European Union expects Britain to seek an extension of its post-Brexit transition period beyond the end of the year, diplomats and officials said on Monday, as negotiations on trade have ground to a halt due to the coronavirus pandemic.

Hungarian parliament grants PM Orban special powers to tackle coronavirus crisis

Hungarian Prime Minister Viktor Orban secured extra powers to fight the coronavirus with an open-ended mandate on Monday after parliament passed a law submitted by his government with a strong majority of the ruling Fidesz party.

Italy may be on wrong path in fighting coronavirus contagion: scientist

Italy's measures to halt coronavirus contagion do not seem to be working and it should change its strategy by setting up centers to separate people with suspected symptoms from their families, a prominent Italian scientist said on Monday.

Putin says Russia's coronavirus measures prevented explosive growth of cases

President Vladimir Putin said on Monday decisive measures by Russia had helped win it time in its battle to contain the coronavirus and to prevent an explosive growth in cases, but that it was vital authorities now used that time effectively.

Tokyo governor calls for fewer outings, says state of coronavirus emergency up to PM

Tokyo's governor on Monday called on residents to avoid outings in the evenings and at weekends as the coronavirus crisis deepened, but said it was up to Prime Minister Shinzo Abe to declare a state of emergency to tackle it. 

Germany: Coronavirus spreading too fast for us to loosen restrictions

Coronavirus is spreading too fast for restrictions on public life in Germany, Europe's economic powerhouse, to be lifted yet, a spokesman for the German government said on Monday.

China takes steps to heal virus-hit economy as infections fall

China ramped up efforts on Monday to heal the world's second-biggest economy as health authorities reported a further drop in new coronavirus cases, although the country remains wary of carriers of the disease coming from abroad and infected people who exhibit no symptoms.

Sourced from Harvard Business Review and CNBC

Without doubt, the Covid-19 outbreak has become one of the biggest threats to the global economy and financial markets.

Since the outbreak, business leaders are asking whether the market drawdown truly signals a recession, how bad a Covid-19 recession would be, what the scenarios are for growth and recovery, and whether there will be any lasting structural impact from the unfolding crisis.

Major financial institutions and banks have already cut their forecasts for the global economy, with the Organisation for Economic Co-operation and Development being one of the latest to do so. The OECD also said it downgraded its 2020 growth forecasts for almost all economies.

Many factories in China are taking longer than expected to resume operations. That, along with a rapid spread of COVID-19 outside China, means that global manufacturing activity could remain subdued for longer.

“From an economic perspective, the key issue is not just the number of cases of COVID-19, but the level of disruption to economies from containment measures,” Ben May, head of global macro research at Oxford Economics, said in a report this week.

Declining Oil Prices

A decrease in global economic activity has lowered the demand for oil, bringing oil prices to multi-year lows. That happened even before a disagreement on production cuts between OPEC and its allies caused the latest plunge in oil prices. China, the epicenter of the coronavirus outbreak, is the world’s largest crude oil importer.

Why Stocks Are Rising on Terrible News

Despite the blow to the global economy, stock market action last week provided some indication that a bottom could be forming. And although it might be premature to declare the bear market dead, the market rose sharply after a historic surge in initial jobless claims, a move consistent with the end of bear markets.

Confusing? Not really. The thinking about bear markets dying on bad news is that the market is always looking ahead, and that an unfolding global recession has now been fully priced into stocks by investors.

“The markets and the economy don’t run in parallel. The market’s running way ahead of the economy,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. “The markets don’t care about what’s happening today, the market cares about what’s happening six months from now.”

Could ‘Indiscriminate Selling’ Be Over?

Economists are expecting a steep fall for the U.S. economy in the second quarter that could exceed a 20% GDP decline, with some 10 million people out of work and an unemployment rate higher than anything the U.S. has ever seen.

But the latest jobless claims data offered the first test of whether investors would be willing to look through the bad readings and continue buying.

There was some speculation that one of the reasons for last Thursday’s rally was that the number, while much higher than the 1.5 million consensus, wasn’t as bad as some forecasts of up to 4 million.

Additionally, CNBC has reported that during the recent market tumble, executives have been buying their company stocks more than selling.

In addition, that the ratio of companies with insider buying compared to insider selling is at 1.75 for March, its highest level since March of 2009, according to Washington Service, a provider of insider-trading and data analytics.

While Morgan Stanley’s Mike Wilson sees best ‘risk-reward’ market in 2 years, stating investors should be taking advantage of the market’s steep coronavirus-driven sell-off from February highs.

More Positive Signs for Comeback

While financial experts expect the downturn to continue in the near term, most agree that markets will recover over the next few months. History has shown that the markets bounce back time and time again.

Federal Reserve Chairman Jerome Powell told NBC’s “TODAY” show last week that he sees a “good rebound” in subsequent quarters and pledged the central bank will do whatever it can to ensure that the recovery “is as vigorous as possible.” That’s exactly the kind of talk that raises hopes in the market.

Regardless of the Covid-19 distresses, economists believe the underlying economic indicators in the U.S. and China to be strong, adding that recent events are likely to “delay but not derail” future growth.

China, in particular, has already shown positive signs of recovery, having recorded a drop-off in new virus cases over recent days. Meanwhile governments elsewhere, including in the U.S., have implemented proactive fiscal measures to support their economies.

The COVID-19 pandemic is a terrible and frightening situation. There’s uncertainty surrounding how long the outbreak will last, how bad it will get, and many other variables. One thing for certain, Forex trading is here to stay and traders around the world will definitely take advantage of it.

XM Donates to the World Health Organization to Combat COVID-19

In an attempt to alleviate the global pandemic caused by the coronavirus (COVID-19), XM made a generous donation to the World Health Organisation (WHO) on 18th March.

The coronavirus epidemic outbreak in December has rapidly reached unprecedented proportions, infecting over 200,000 people in over 160 countries and territories around the world by 17 March.

While medical researchers worldwide are working round the clock to find and test a vaccine for the life-threatening COVID-19, the whole world shows solidarity and helps to their best abilities.

In order to enable all individuals, institutions and corporations to unite and contribute to the global response efforts in combatting COVID-19, the World Health Organisation joined forces with the United Nations Foundation and the Swiss Philanthropy Foundation to launch a Solidarity Response Fund.

This is a time to act in solidarity and contribute to a noble cause that can save hundreds of thousands of lives. By donating to the Solidarity Response Fund, XM kindly invites all clients and partners to also help if they can.