Amid all of the shock caused throughout the financial markets by the coronavirus epidemic, the central banks of several different countries promised timely action to prevent economic damage. Most notably, these included the Federal Reserve of the United States, the People’s Bank of China, the Bank of Japan, the Bank of England, and the European Central Bank. Though the threat remains and the mood on the markets is still pessimistic, these assurances were still welcome.
Still, stock indices around the world are currently suffering losses, with the exception of the Nasdaq 100 (at least so far).
One major shift in the markets right now is that investors have less confidence in the US dollar. The USD previously benefited immensely from the coronavirus shock, soaring to multi-year highs against many other currencies. However, the dollar’s momentum disappeared and the reserve currency is losing positions at the moment.
The euro climbed to one-month highs against the USD as a result. The single currency is well-positioned for more growth, provided that the fundamental reports coming from Europe this week are not disappointing.
Meanwhile, the British pound weakened against both the dollar and the euro. The reason for the sterling’s drop is Prime Minister Boris Johnson’s hard stance towards the negotiations with the European Union, namely his insistence that the European Court of Justice is not involved. The talks are beginning this week.
