Global equity markets plunged, to open the new week, while the US Dollar spiked upwards. Asian markets were hit by rumours that major banks had been involved in numerous, suspicious fund transfers, over many years. These reports hit banking stocks hard, dragging markets lower, while alarming reports on a further spike in the virus, as the Northern Hemisphere moves into winter. The crashing stock markets sent the US Dollar soaring, as a safe haven play. The EUR fell back to 1.1750, while the GBP crashed back below 1.2800, where scientist are warning of huge increases in the spread of the virus.
To add to the ‘witches brew’ was the deterioration of US/China relations, which will upset the existing supply chain and directly impact the trade exposed, commodity currencies. The AUD tumbled back to 0.7200, while the NZD crashed to 0.6660! Global sentiment has been negative for the last three weeks and the latest triggers have added to this perfect storm.
This is now looking like a market correction, called by many pundits, while nervous markets await the next shoe to drop?