News & Analysis

Overnight on Wall Street: Tuesday 25/02/2020

February 25, 2020

By Deepta Bolaky

Equity Markets

A risk-averse environment dominated financial markets on Monday as the wider spread of the coronavirus across borders renewed fears. The sell-off was more pronounced in the European and US session as major equity benchmarks dropped by more than 3% as investors pulled out from riskier assets.

Source: Bloomberg Terminal

Wall Street finished in a sea of red and US stocks dropped more than 3% for the first time since December 2018. The energy and technology sectors were among the hardest hit.

Currency Markets

Investors sought safety with the classic haven assets. The Japanese Yen and the US dollar were among the best performers on Tuesday.

Source: Bloomberg Terminal

US Dollar Index

The US dollar index struggled to edge higher despite a stronger greenback. The Euro has the biggest weightings in the index and the improvement in the shared currency weighed on the index. As of writing, it is currently trading at 99.20.

US Dollar Index (Daily Chart)

Source: GO MT4 


The Pound struggled to maintain gains following strong CPI figures. A stronger US dollar and EU and UK trade negotiations capped the upside momentum. The GBPUSD pair fell and is trading in the lower levels of the 1.29 range.


The shared currency found support on better-than-expected IFO surveys in Germany:

  • Business Climate above expectations (95.3) in February: Actual (96.1)
  • Current Assessment above expectations (98.6) in February: Actual (98.9)
  • Expectations above expectations (92.2) in February: Actual (93.4)

After gapping lower on the open, the EURUSD pair rose higher to close at 1.0850 level.

EURUSD (Daily Chart)

Source: GO MT5

Oil & Gold

Italy virus risks revived fears of a contagion outside China which fuelled the selling pressure in the oil markets. WTI and Brent Crude dropped back to $51 and $55. We expect traders to monitor weekly oil reports and discussions of deeper production cuts by OPEC members and allies.

UKOUSD and USOUSD (Daily Chart)

Source: GO MT4

Gold rallied as coronavirus fears gripped markets. The XAUUSD traded at a high of $1,689 which marks a 7-year high before trimming gains to trade around slightly above the $1,600 level.

XAUUSD (Hourly Chart)

Source: Bloomberg Terminal

Key Upcoming Events

Leading Economic Index (Japan)
Gross Domestic Product (Germany)
Housing Price Index, S&P/Case Shiller Home Price Indices and Consumer Confidence (US)
BoC’s Lane Speech (Canada)


Wednesday, 26th February 2020
Indicative Index Dividends
Dividends are in Points

Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs.  Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.


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