Wednesday, 29 January 2020

FOREX caught virus

Posted by FortFS at 15:13 Labels: this is interesting

The new strain of coronavirus, which originated in China, claims to be the new pandemic, and has seriously scared investors on Wall Street. China closes public transport and cancels celebrations. Stores, bars, airlines and transport companies bear losses from canceled flights, and this is just the tip of the iceberg looming on the global economy in the most difficult period. It’s no secret to anyone that the slowdown in China’s consumer demand has hit the economies of not only developing countries, but also the economies of the United States and Europe. Weakened by the trade war, the economies of China, the United States and Europe are balancing on the brink of recession, and the conflicts in the Middle East threaten the world's energy security. Nonetheless, US stock indices peaked! It is not difficult to guess that the simplest solution for investors is to sell their shares and, after taking a solid profits, just to wait for the situation to be clarified. This is exactly what happened on Friday - US stock indices began to decline sharply, and defensive assets such as gold and the Japanese yen showed growth.

According to the FortFS broker, based on the history of Ebola outbreaks and other dangerous diseases over the past 10-15 years, it can take up to 3-4 weeks to fight a new virus. Accordingly, the demand for gold, silver and the yen may last until the end of February.

Traders should closely monitor the progress of the fight against coronavirus, as well as how the economic indicators of China and the United States will change in the coming weeks. If fears turn out to be exaggerated, and the economy does not suffer as much as skeptics shout about it, a new stage in the explosive growth of global stock indices could begin. This will be a great opportunity to sell yen and buy indexes.