Coronavirus fears led to a historic market drop in U.S. stocks,in their worst day shut borders and disrupted daily life around the world.
Governments took increasingly drastic measures to try to reduce the severity of the global outbreak. Despite emergency action by global central banks, U.S. stock markets falling 12% to 13%, wiped out trillions of dollars in market value.
Just a month ago, financial markets were hitting record highs on the assumption the outbreak would largely be contained in China.
The Federal Reserve on Sunday slashed rates to zero and launched a new bond purchase program. Other central banks have taken similar measures but the moves have so far failed to stem liquidity strains and market panic. Money markets are pricing in a 33% chance of a further 25 basis point BoE interest rate cut next week.
There have now been more cases and more deaths outside mainland China than inside, with 180,000 cases worldwide and over 7,000 deaths.
Globally, there are now over 101,000 cases and 7,165 deaths linked to the coronavirus across 163 countries and territories. China now accounts for less than half of all cases and deaths. Around 44% of cases have reportedly recovered.
START TRADINGForex – Historic Market Drop driven by COVID
Concerns about economic shutdowns from the coronavirus continued to dent risk appetite.
The U.S. dollar surged on Tuesday as companies and investors sought out the most liquid currency. The dollar index was last at 99.43, up 1.33% on the day.
The euro dropped 1.63% to $1.10.
The dollar rallied 1% versus the yen to 106.91 yen.
The Australian dollar, which is sensitive to global growth due to the country’s commodities exports, fell 1.70% to $0.6013, its weakest since 2003. The aussie is down 10% since March 9.
The sterling dropped to its lowest level against the dollar since early September on Tuesday. Investors hoovered up the U.S. currency even after Britain toughened its approach to containing the coronavirus outbreak.
The pound fell as much as 2% to $1.2029 on Tuesday before recovering slightly. Against the euro it edged up 0.3% to 90.97 pence per euro. But it was still trading near the previous day’s six-month low of 89.89 pence.
Brent crude fell below $30 a barrel on Tuesday to its lowest since 2016, as the coronavirus pandemic hits economic growth. Brent crude futures fell 22 cents, or 0.7%, to $29.85 a barrel by 11:42 a.m. EDT.
The U.S. crude benchmark, however, diverged from Brent and was modestly higher. WTI crude futures rose 5 cents to $28.75 a barrel. It has slumped more than 50% since Jan. 2.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money