Business activity collapsed worldwide at a record pace in March as measures to contain the pandemic hit the global economy leading to a deep global recession.
The highly contagious coronavirus has caused entire regions to be placed on lockdown, halting services and production and breaking supply chains.
Data firm IHS Markit said on Tuesday its flash U.S. Composite Output Index, which tracks the manufacturing and services sectors, dropped to a reading of 40.5 this month. That was an all-time low and followed a reading of 49.6 in February.
The message was equally grim from the 19 countries that use the euro. IHS Markit’s flash composite PMI for the euro zone plummeted to a record low of 31.4 in March.
A PMI for the services sector in Germany, Europe’s largest economy, showed a record contraction in activity. Sister surveys showed Britain’s economy shrinking at a record pace.
Goldman Sachs is predicting that the global economy will shrink 1.0% this year.
G7 finance ministers and central bank governors pledged to expand fiscal and monetary actions for as long as necessary to restore growth and confidence.
The International Monetary Fund is predicting a global recession. The world’s 20 largest economies agreed on Monday to develop an “action plan,” but without specifics.START TRADING
Forex – Pandemic hammers world economy
Ιnvestors rushed to buy the U.S. dollar amid another round of panic about the economic hit from the coronavirus crisis.
The dollar gave up earlier losses against a basket of currencies on Wednesday as coronavirus spreads across U.S. U.S. senators and Trump administration officials reached agreement on a $2 trillion stimulus package.
The U.S. currency was broadly steady against the Japanese yen at 111.17 yen per dollar.
The euro was up nearly 0.19% versus the greenback at $1.0807, after earlier rising as far as $1.0850. The single currency was weighed down by weak European economic data on Wednesday.
The risk-sensitive Australian dollar jumped over the 60-cent mark for the first time in a week as news of the agreement trickled out, and then extended gains to $0.6047. While the Australian dollar is up 1.5% for the session, both it and the pound have lost more than 7% for the month.
The New Zealand dollar was 1% ahead at $0.5894.
The British pound extended its rally as the safe-haven U.S. dollar fell across the board on some signs of stabler risk conditions amid the pandemic. The pound was last trading up 1.4% at $1.1936, having hit earlier a one-week high of $1.1971. Last week, it briefly touched a 35-year low of $1.1413.
Against the euro, sterling was also higher by 1% at 90.81 pence – off last week’s lows of 95 pence.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money