The coronavirus spread has pushed central banks in developed economies to take emergency measures to shield their economies from the corona impact.
Equiti Group market analysts Gaurav Kashyap and Mark Lee believe that the central banks’ action will help keep domestic markets afloat and at large global markets.
For instance, the Fed emergency rates cut on March 3 is positive for US markets and came earlier than the anticipated March 18 date. The fed cut will increase demand for the dollar and signals a positive outlook of the US Dollar index.
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G7 finance ministers and central bank governors hold emergency meeting vowing to take all possible steps to safeguard the global economy from coronavirus impact.
The Reserve Bank of Australia has cut official interest rates to a new record low of 0.5% due to the “significant effect” of the coronavirus outbreak on the Australian economy
Across Asia, Bank of Japan committed ¥500 billion ($4.6 billion) in government bonds with a repurchase agreement to provide liquidity to market players.
With the increasing uncertainty, activity has migrated to safe-haven assets such as gold, Japanese Yen, US Dollar, and US Treasuries.
Editors Note;
Equiti Group Ltd is the parent company of some of the most progressive FX and CFD brands and prime brokerage providers in the industry. In East Africa, the company trades as EGM Securities with its flagship Product FX Pesa
