Market News: The Pandemic Continues: Underworld For All

The Pandemic Continues: Underworld For
All

Photo Credit: www.military.com/

As the world struggles to battle and contain the Covid-19, financial markets are
experiencing hell, with instruments such as commodities, currency pairs, and
stocks market are trading at record highs and lows. Overall sentiment now
focuses on the dollar, where investors’ confidence is all focusing on only one
asset: the US dollar.

With
countries across the world are entering lockdown mode, business, schools and
many everyday operations are forced to halt, in efforts to prevent further
spreading of the virus. Consumption and production declined drastically,
dragging down the economy as well with a lack of confidence, causing major
sell-off in stocks market and currency as well.

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One
of the significant markets that suffered the most is the crude oil, with concerns
now not only building upon the demand side but the supply as well. After the
recent OPEC+ meeting, which was supposed to provide support for falling oil
prices, things ended worst for the market when Russia disagree to cooperate
with OPEC’s proposal on a deeper production cut. The decision let to an all-out
price war between two major oil cartels: Saudi Arabia & Russia. With the
problem of declining demand now added on with oversupply concerns, oil prices
fell to a low near $20 per barrel.

With
ongoing uncertainties in the market, safe-havens would be expected to gain.
However, as the precious gold is being sold-off by investors to cover margin
losses in their stock portfolios, the market’s preference of safe-haven now
shifted to the US dollar. Being the US, the largest and most powerful country,
the greenback is mostly demanded amid market fears, allowing the dollar index
to reach its record high in March 2017 near the 101.00 handle.

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With
the significant strength gained by the dollar, currencies paired against it are
slumping to record lows, especially the Asian pairs (AUD/USD & NZD/USD),
which were already facing intense pressure due to the economic downfall in
China, their major trading partners. AUD/USD now trades at its lowest level since
2002 below 0.5600, while NZD/USD  pair
currently trading at 2008 low also below 0.5600.

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Besides
that, GBP/USD fell drastically to its lowest level in 1985, over three decades,
near 1.1500. The fall in the pound was far worst than the case during the
announcement of Brexit in 2016, as investors’ confidence towards UK’s effort in
battling the virus pandemic falls due to the shortcoming measures taken.
Besides that, with falling oil prices, the Canadian dollar was being sold as
well. The pair of USD/CAD now trades at its 2016 high near 1.4600.

It
is indeed a tough time for the market, with the Covid-19 pandemic showing signs
of a global recession. Central banks and governments are doing the best they
can to bolstering the economy’s downfall while citizens are struggling to stay
healthy and alive.

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As
market conditions aren’t expected to make a comeback anytime soon until a cure
is found, Regain Capital wishes to remind readers out there to continually wash
your hands, stay hygienic, drink tons of water and keep social distancing. Stay
home, stay safe, stay healthy.