On Monday, the Euro climbed almost four months up from the dollar. As the investors, expected the European leaders crack the deadlock, and ink an economic bailout package when they approached a record-size marathon summit.

EU summit:

The Euro changed hands at $1,1439, only below a four-month peak of $1,1452 on Wednesday.

The EU leaders were at a deadlock over a potential recovery fund of EUR 750 billion ($858,30 billion), which the executive European Commission will collect on their behalf through the EU’s financial markets.

It will be a landmark move in the direction of a greater convergence of fiscal capital for the Union. But many “frugal” wealthy northern European states have sought to locate a smaller fund in the process of minimizing the allocation of funds between grants and repayable loans.

A source estimated that EUR 350 billion in grants, was the highest appropriate to the thrifty north camps. It was compared to the 400 billion that many others, including Germany and France, found to be a bare minimum.

Diplomats also indicated that the meeting could be postponed and that they would seek to find a deal again next month. But business participants assume that they will enter a deal in the future even though they failed to execute this time.

Other Currencies:

Diwan security strategist, Yukio Ishizuki said that he is unable to conclude what the meeting was supposed to mean. He also added, even though there is no deal, the effect is going to be minimal as the Euro now seems fairly Strong.

While buyers retain a high tolerance for uncertainty, the currency is increasingly low, banking for further investment, not just from Europe but also from the USA.

The dollar index was 95.949 and, last month was nearly three months low of 95.716.

Among other markets, the British Pound stood at $1.2570 and the Australian Dollar For $0.6999.

China’s offshore yuan has stood at $6.9889, a little less than last week’s 6.9806, which was high in four months.

On Wednesday, the currency markets saw a revival of the risk sentiment as the steady progress towards the COVID-19 vaccine helped to strengthen the commodity currencies and the rebound of the equities. All these developments have pushed the dollar to a one-month low.

Since June, the dollar index fell below 96 for the first time, thereby dropping to a one-month low of 95.770. However, it managed to recover some of the losses in the afternoon trade finishing at 96.070 finally.

Moderna, a US Based company, has produced a COVID-19 vaccine on an experimental basis, and it induced immune responses from all 45 volunteers. However, there is still some space for caution as the US-China relations have worsened, and there are hidden fears about a possible economic impact of the 2nd wave of Coronavirus vaccine in the US. Florida, the new epicenter of this deadly pandemic, has reported more than 100 further fatalities that bring the total death toll over 4500.

The Canadian dollar was 0.73% stronger, and the NZD was up by 0.46% among the riskier currencies linked to commodities. The USD’s present weakened situation was attributed to the risk-on backdrop that saw the stocks head higher, prompting undoing the safe-haven USD positions. The sudden surge in risk-taking was due to the news that Moderna’s experimental vaccine has a lot of promise.

The Euro has risen to a 4-month high of $1.145 vs. the dollar and is very close to a peak of $1.150 that was achieved in the early part of March. The currency got a boost by the unique combination of the dollar’s weakness and the hope that the EU leaders will finally reach an agreement about the Coronavirus Recovery Fund.

The global oil demand fell by a record of 9.3 MB/d in April 2020. This was primarily due to the reduction in the effective demand for crude oil in numerous countries because of partial or full lockdown. This downgrade in the crude oil stocks was still falling as restrictions were imposed on vehicular movement in several nations severely affected by the coronavirus pandemic. B.P. warned the Opec about the unexpected fall in demand for crude oil and gas along with long term consequences due to the current market condition of the crude oil stock prices.

Moreover, they have also recommended an effective measure to protect the business in the scenario of the dip in oil prices and suggested to deploy the method of cost-cutting. The cost-cutting measure was also used by them, like holding up the upstream project work and decreasing the lower margin level projects. The crude oil stock prices are $40.44 per barrel, which is 11.00 points, which is nearly 0.36% rise compared to the previous prices.

OPEC Meetings about change in global crude oil prices

After a sharp decline, the U.S. crude oil inventories, the oil prices rose on Wednesday as the stock market opened. To discuss the future level of production of the crude oil OPEC made a meeting with its allies. In the meeting, their agenda was to decide whether to increase the output cuts of 9.7 million barrels in a day that would end in July or decrease them to 7.7 million. The tone for the future market will be set by the decision of OPEC and its allies in this regard. However, it also stated that the global demand for crude oil would see an exponential rise of 107% in the year 2021.

Crude Oil indices in the global market 

The crude oil tracked its negative cues in the equity markets, which slipped to nearly five months high due to the flaring tensions between the United States of America and China. Currently, the WTI of the U.S. seems to be trading at 0.98% lower. Similarly, the Brent crude is trading at $42.38 per barrel, which is nearly 2.08% lower. This made a large drift between both the contracts. OPEC basket traded at $43.38, which is -0.08 points as compared to its previous trading points.  URALS crude oil stocks made no loss or profit in the stocks market today as it remained stuck to its previous price of $42.85 per barrel.

A quick overview of Asian indexes

The shares in the Asian market did not perform well this week and fell drastically on Tuesday. Japan’s Nikki 225 index was – 0.86%, and it decreased to nearly 0.8% compared to the previous opening. Similarly, Hong Kong’s Hang Sang index fell to -1.19%, which is approximately 1.7% lower than the previous. Moreover, the other indexes which performed their worst on Tuesday are Shanghai Composite -0.80%, Shenzhen composite SHCOMP-.086%, Kospi of South Korea -0.11%, Singapore -0.18%, and Taiwan -0.02 %. Among this, the only index performed at a slightly higher rate was the Indonesian JAKIDX, which was 0.15%.

The condition of the US market

The United Nation’s stock market performed pretty good on Tuesday. The stocks opened a little prominent than Monday as the investors looked for the slew of earning ahead of them. This slaughter of earnings resulted from the big banks in the United States. S&P 500 and Nasdaq seem to erase their earlier gain to end on the low note during the regular session. However, each of them advanced strongly as compared to the previous day. This rise seems to be done in part by the anticipation of the coronavirus vaccine from BioNTech and Pfizer. Moreover, the Dow ended on a high note to a 4% hike in shares of Pfizer buoying the index. For the broader, the rollback of the reopening plans has put a restriction upon the risk rally.

The impact of increased cases of coronavirus and US-China Tension on market

The Asian market has been greatly impacted by the rising cases of coronavirus in the United States of America and also from the increasing tensions between the US and China. The shares slipped in the Asian market exponentially as more jobs were lost due to the US-China tensions and coronavirus pandemic. The White House decided to reject all the maritime claims made by China in the South China sea; this added more to the investor’s jitters. Both of them are the world’s largest economy, but now there is a dispute over everything from pandemic to human rights. One of the worst indicators of this was the recession in the GDP of Singapore in the second quarter, even though they were expecting a rise. Furthermore, Wall Street seems to be experiencing deadly reminders of the coronavirus pandemic as the plan for reopening causes a spike in the coronavirus cases across the country.

To stop the further increase in the number of cases, the local government has decided to close all the bars and dining areas along with some other restrictions. California remains one of the most affected states in America, where the number of cases is rising and thereby threatening the economy of the country.

The potential investors in the Asian countries appear to expect the banks to kick off earning sessions at an interval of three months. For this, they had to set aside their billions of dollars away from the market to cover the bad loans which are become worse with the passage of days, The only hope that now remains in the minds of the Asian, as well as the American investors, is that over the time stocks would improve and also the economy.

The USD was decreased in Asian markets on Monday, with analysts looking at expected worldwide economic results, and US corporate profits, to determine whether there is any basis for the market’s optimism.

In the early Monday market, the dollar index major currencies declined by 0.2% to 96,452.

Coronavirus reports for the US are surging over the weekend, with more than 15k additional new cases recorded across every state in Florida in 24 hours. It exceeded the highest count of cases in New York, which recorded in April.

Expert’s Views:

Yukio Ishizuki, a senior currency strategist at Daiwa Securities, said that

Hopes for the production of medicines and disease vaccinations are also promoting risk sentiment, as there are economic measures that have so far demonstrated progress from lockdowns.

Masafumi Yamamoto, the chief currency strategist at Mizuho Securities, said,

A weekly measure of customer trust in Australia has fallen after an increase in cases in Melbourne. It may happen in the United States, where the severity of the epidemic is far higher, he observed.

Other currency Value:

The U.S. corporate earnings season will begin next week, offering another opportunity to determine the extent of the devastation and rehabilitation from this pandemic.

China will announce its June trade statistics and a bunch of other numbers, including GDP for the second quarte.

• In early trade, the Chinese yuan stood flat at 7,0068 per dollar.
• The euro exchanged at $1.1314, sustaining a steady increase since late last month.

The recent pandemic has been the most devastating thing that every single trade has experienced. Every business got impacted by this COVID-19 pandemic. With the closure of various businesses and a huge loss to the stock markets, the trend was really hard to predict during this time. The stock market’s response to the pandemic was full of worries due to the volatility because of the traders who were involved in panic selling out of the falling market fear. The market dropped largely and the circuit-breakers throughout the market generated four times in the month of March itself. In the hope that the stock market will settle down, there was the safeguard pause trading for 15 minutes. 

The volatile trend on the stock market after the pandemic

The pandemic was not common and the market trends were equally unexpected. The market in the US showed some really important and logic-defying performance during this period. With the investments coming down every moment because of the low demands, it was hard to keep the prices of the shares afloat. There was no theory of managing the market during pandemics and evaluating the news coming from economical sources of the country was inflexible. The whole stock market could not completely depend on that news trending from these sources as not every one of them was true. 

The three important phases of the stock market and jump in the overall market

There were three absolutely unique phases of the market during the pandemic. From the very commencement of the pandemic, the rise of the S&P 500 by 3% lasted from January 30 to February 19. Then the market experienced the second phase, which showed a drop of 34% till March 23. After this, in the third phase, 42% upswing was seen from March 23 till the present day. Every phase of the trend discloses a puzzling connotation with the flashing news. This is because the covered market’s reaction is simplified through the reactions of the investors and their related stories. 

Impact on investing due to pandemic

As the pandemic was not an event familiar to the people at all, it was hard for the market investors to predict the situation and pay heed to such news. But as soon as the pandemic news spread like wildfire, the more significant reactions were clear through the market prices that emerged gradually. The impact on investment could be seen as investors restrained from investing more and also involved in rapid sales. 

Is it time to think of hedge funds?

Though the spread of COVID-19 was rapid and it hit the stock market as well, the hedge fund managers tried to get the benefits from those business bodies which can get benefited from lockdown and quarantined situation. So it is pretty safe to think of investing in hedge funds even during this pandemic.

Conclusion

The distressing stock market depression that continued, intense stories of struggle and hardship faced by the businesses caused by the unforeseen lockdown were explicit. Though the US’s stock market was going down by far, it tried to get hold of the situation and established various stock policies to uphold the market.

The New Zealand currency (NZD) woke up to a rude shock on Friday as it began trading lower after reaching the highest level since the last week of January. After an extended surge in time and price, the NZD posted a falling closing price reversal at the top, which is common during an uptrend. It does suggest that selling is greater than buying just below the main top at 0.6629. If this gets eventually confirmed, the closing price phenomenon should trigger that initiation of a 2 to 3-day counter-trend break. As per the last confirmed reports, the NZD/USD was trading at -0.23%.

On the other hand, the surging demand for the US dollar has helped to drive the NZD to lower levels. The USD, along with other so-called safe-haven currencies, were well bid on Friday following the detection of new Coronavirus cases in the US, which undermined any chance of a quick economic recovery. It is alarming to note that more than 60,000 new cases of COVID-19 infections were reported across the country a couple of days back, which has severely dented the confidence of the native consumers to make a return to public spaces.

Financial experts claim that trading through 0.6600 will help to make ineffective the closing price reversal top and thereby initiate the restart of an upward tendency. The minor trend is on the up and it will surely change to down on the move through the last minor bottom at 0.6519 and this scenario will confirm a change in momentum. Going by the closing price reversal on the top yesterday and the early price scenario, the direction of the NZD/USD is going to be governed by the trader reaction to the Thursday’s low of 0.6551.

The US dollar suffered losses against the majority of the currencies on Thursday as rally in riskier assets such as commodities and global equities put a dent in the US currency’s safe-haven status. The Chinese Yuan rose sharply and achieved a four-month high against the much-fancied USD, thereby extending the recent gains. Investors began to increase positions in Chinese stocks in anticipation of the recovery of the 2nd largest economy in the world. However, persistent worries about the Coronavirus pandemic have kept some currency pairs in a real tight range. Still, the USD is increasingly suffering losses as investors prefer riskier bets on long-term economic growth.

It is important to note that the USD fell by 0.3% against the Euro, thereby reaching a one-month low. However, it is expected that the Euro will get a significant boost when Germany releases the export data. Germany is Euro Zone’s largest economy, and financial experts believe that shipments will rebound sharply in May from a substantial decline in the previous month. There were other setbacks in-store as USD fell to a 3-week low against the GBP at 1.2637 and it fell to a 4-month low against Swiss Franc at 0.9365.

On the other hand, the Chinese shares continued with their remarkable spree and ended up with a five-year high during the Asian season. Speculations are rife that there would be further gains in European equities and thus highlighting the enthusiasm for risk-on trades. Although the investors are keen to look at the US’s weekly jobless claims, the USD is set to remain on the back foot for some time now. The star performance of the Chinese currency is a remarkable story. Investors have successfully shrugged off the diplomatic tension between Beijing and Washington to focus on the Chinese economy and the technological sector. While the investors are thinking twice about taking big positions before the traditional season of summer holidays, analysts say that sentiments favor the further decline of the USD as investors try to look beyond the recent and sudden spike of Coronavirus cases in some of the countries.