The central bank highlighted the need for more fiscal stimulus amid the ongoing the coronavirus pandemic
Wall Street stocks finished lower overnight after the minutes of the Federal Reserve’s July meeting showed the officials cut their economic growth forecast for the remainder of this year and highlighted the need for more fiscal stimulus amid the ongoing coronavirus pandemic. The Dow Jones Industrial Average shed 0.3%, the S&P 500 fell 0.44%, and the Nasdaq Composite Index slumped 0.6%.
Today in Asia, equities followed suit amid the uncertainty surrounding the economic recovery in the United States and globally. The ongoing US-China tensions and new clusters of coronavirus infections added to the downbeat tone in the markets on Thursday. As a result, MSCI’s broadest index of Asia-Pacific shares outside Japan slid 1.24% during the session. Shares in China fell by 0.8%, and Japanese stocks slid 0.77%.
As the Fed members said additional easing may be needed because a rebound in employment was already slowing, European equities opened lower as well. The Stoxx Europe 600 dropped over 1.0%, and similar declines were seen for other regional indexes.
Elsewhere, the dollar bounced from long-term lows amid risk aversion fueled by a downbeat tone from the Federal Reserve officials. However, the selling pressure surrounding the greenback is reemerging already, as the EURUSD pair derived support from the 1.18 handle and turned flat after failed bearish attempts. Later in the day, the pair could be affected by the ECB meeting minutes and US jobless claims data.
In other markets, gold prices plunged aggressively on Wednesday amid a local rally in USD. The precious metal retreated to the $1,924 area after failed attempts to preserve gains above the $2,000 handle. Now, the bullion needs to stay above $1,900 in the short term in order to refrain from deeper losses and resume the ascent after the cureте correction. In a wider picture, the bullish trend remains intact.