Forex Today: Markets Dominated by Relative Strength in GBP

WTI Crude Oil appears to be recovering a little after selling off over the last two days, following its recovery last week from its recent sharp fall to an  18-year low below $20.

  • The rate of increase globally in fatalities and new confirmed infections from the coronavirus pandemic continues to increase exponentially, with its epicenter now located in New York. A world recession or possibly even depression appears to be inevitable, with Goldman Sachs forecasting a 34% drop in U.S. Q2 annualized GDP and other analysts seeing a 30% unemployment rate in the near future. If correct, these will be the worst such numbers seen since the 1930s, but it should be noted many analysts continue to see a much better outlook for U.S. unemployment.
  • Despite the gloomy global economic outlook, stock markets (especially in the U.S.A.) are still rising, and other risky assets have also been boosted. At one stage yesterday the Dow Jones Industrial Average was trading at a level where it had regained almost half of its value lost during its recent fall from peak to low – exceeding this would have been technically significant. Many analysts think the bottom of this bear market has already been reached, but other analysts see further strong falls likely in stocks over the coming weeks and months. There is a strong divergence of opinion.
  • The Prime Minister of the United Kingdom, Boris Johnson, remains stable in an intensive care unit after being hospitalized Sunday due to persistent coronavirus symptoms. He is not requiring ventilation. He tested positive for the virus 12 days ago.
  • The rate of increase in new confirmed cases seems to have peaked in the hard-hit European nations of Italy and Spain, but both nations saw a spike in their daily death tolls yesterday, as did the U.K. and France. Death rates and new infections both still seem to be increasing in the U.S.A. and in the U.K. The strongest growth of the virus in the world now is happening in New York City and New York State, with the U.S.A. now leading the world in number of confirmed cases (about 28% of the global total), and having had almost 13,000 deaths so far. Even in Germany, the death rate to confirmed infections has risen to almost 2%. The U.S.A., France, Italy, Spain and Germany all have had over 100,000 confirmed cases.
  • The price of Gold may have peaked when it approached the $1680 area near its recent multi-year high price.
  • WTI Crude Oil appears to be recovering a little after selling off over the last two days, following its recovery last week from its recent sharp fall to an  18-year low below $20.
  • Currency markets are currently dominated by relative strength in the British Pound, while the Australian and Canadian Dollars are weakening.
  • Markets have been affected by high relative volatility, but this is generally decreasing, although stocks are still showing high volatility.
  • There are again no high-impact economic data releases scheduled for today, so Forex markets may be relatively quiet. Important releases are due this Thursday and Friday.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.