Following a decent recovery on Wall Street overnight, Asian stocks suffered losses on Wednesday, confirming the unstable nature of market sentiment after a massive plunge at the start of the week. In Europe, equities received a boost from the Bank of England’s emergency rate cut by 50 bps from 0.75% to 0.25%. Meanwhile, in her latest comments, the ECB governor Lagarde said that Europe risks 2008-style crisis because of the coronavirus outbreak, and the central bank is looking at all policy tools. She also warned European leaders of a major economic shock and said that urgent action is needed now.
The pound saw a short-lived decline following a rate cut by the Bank of England. After a knee-jerk reaction, GBPUSD got back above the 1.29 handle amid a broad-based dollar weakness on the news about a rise in coronavirus cases in the United States. Now, the cable needs to regain the 50- and 100-DMAs around the 1.30 psychological level. Against this backdrop, the euro resumed the ascent after a short-term bearish correction witnessed on Tuesday. EURUSD has settled above 1.13 but struggled to challenge the 1.1370 region earlier in the day after Lagarde’s comments.
In the oil market, Brent crude is back under pressure below $37 after a brief jump to $39.60 at the start of the day. Oil traders prefer to sell the futures on bullish attempts due to a heightened uncertainty following Russia’s exit from the OPEC+ deal. The local pressure reemerged amid the talks about the possibility of increasing oil production to 13 million barrels per day instead of 12 million barrels discussed earlier. In the short term, the upside potential in Brent will likely remain limited by the $40 psychological level.
Meanwhile, bitcoin resumed the decline after a one-day recovery on Tuesday. BTCUSD failed to hold above the $8,000 figure and has settled around $7,800 today. The cryptocurrency has been trading far below the three moving averages, and the bearish risks continue to persist in the market. The prices may see additional losses before a reversal takes place in the medium term. For now, the $8,000 figure remains in the market focus.
