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Forex Today: Monday mayhem, wild currency moves, Gold fakeout, oil -30%, amid coronavirus panic

Here is what you need to know on Monday, March 9:

Markets are panicking with wild moves across the board, including flash crashes. Investors are increasingly worried about the spread of coronavirus and its impact on the global economy.

Coronavirus greatest worries: Over the weekend, Italy announced that it is locking down most of its north, an area including 16 million people – a quarter of the population – and most of its industry. The death toll jumped from 233 to 366 on Sunday, and the number of infections topped 7,000. Markets are also worried about the spread in the US – the world's largest economy – where testing for the respiratory disease has been slow. America's mortalities are only at 21, but some fear a leap. In total, over 110,000 cases are confirmed, and the death toll is around 3,800.

Mammoth bond moves: Investors are flocking into the safety of US bonds and reflecting an outright US recession. The benchmark US 10-year Treasury yield is dropping below 0.50%. PIMCO says an outright downturn is on the cards. 

The US dollar is on the back foot against majors with USD/JPY falling below 102 at one point, the lowest since 2016, EUR/USD nearing 1.15, the highest since December 2018, and GBP/USD swinging above 1.31 at one point. The most extreme moves were reversed, but the USD/JPY remains below 103.

The greenback beat commodity currencies with AUD/USD flash-crashing below 0.64, NZD/USD to near 0.60. USD/CAD jumped above 1.37 and is holding onto gains above 1.36, amid the fall in prices. 

Gold jumped to a new seven-year high at $1,703.19 before turning down and trading below $1,670. 

Crude crashing: Saudi Arabia decided to kick off a price war, offering discounts to customers and ramping up production. The decision has come after talks between OPEC and non-OPEC countries – led by Russia – collapsed on Friday. WTI is trading below $30, down some 30% after falling on Friday. The Saudis originally wanted to prolong and deepen oil production cuts in the wake of the coronavirus crisis. 

Stock markets in Asia are plunging with Japan's Topix entering a bear market – 20% down from the peak – and US eMini S&P futures pointing to a 5% plummet. 

In economic data, Japan's final Gross Domestic Product saw a downgrade to -1.8% for the fourth quarter, worse than initially reported. The eurozone Sentix Investor Confidence is set to turn negative in March. Friday's US Non-Farm Payrolls figures for February – that beat expectations with 273,000 – have faded into the background. 

Cryptocurrencies lost ground over the weekend, with Bitcoin falling below $8,000.

Author

Yohay Elam

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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