Оnline forex broker, ATFX, released its market ourlook for the second quarter of 2020. The broker’s in-house experts report their views on market influencing factors. The analytics in the report provide predictions on major currency pairs, commodities, equities and cryptocurrency for Q2.
Alejandro Zambrano, ATFX’s Global Chief Market Strategist, who covers the major currency pairs such as EUR/USD, USD/JPY, AUD/USD, and GBP/USD, explains his predictions for them in two most likely scenarios.
Alejandro Zambrano explained:
Alejandro Zambrano
If the borders close, the Eurozone could slump into a recession.
However, the euro could rally if the coronavirus pandemic is contained early in the quarter.
In relation to the USD/JPY outlook, Alejandro Zambrano added:
The economic situation in Japan tends to have a low impact on the currency until the Bank of Japan decides to embark on large QE and rate cut programs … the currency tends therefore to follow the mood of global risk appetite.
Senior content manager at ATFX UK, Cameron Bowen, observes that the performance of global stock indices is going to be influenced greatly by the coronavirus pandemic which has led to the worst ever quarterly performance for stocks in Q1. How the stocks perform in the Q2 will largely by determined by how governments handle the pandemic.
Cameron Bowen commented:
Cameron Bowen
The shortterm future of this market will ultimately come down to how the spread of the coronavirus is handled … I expect to see continued volatility in the coming weeks but I think we will see it soften.
Bowen also covers cryptocurrency and notes that their performance revokes the status of crypto as a safe haven or an uncorrelated asset class.
Martin Lam, ATFX’s Chief Analyst for the Asia Pacific region covers commodities such as gold and oil. He notes that gold is likely to recover during the second quarter. Another sell-off in the equity market could result in surge in gold surpassing its recent high of $1,702 in March. Auctions in gold markets could just as well be subdued if the equity markets improve and the global economy recovers. Further central bank easing could also prompt a recovery by gold.
In the crude oil market, Lam expects a rise on higher demand and potential supply cuts in the second quarter. Usually, oil prices are strong in Q2 and this seasonal strength could uplift the commodity. The outlook of the crude oil will also be affected by the coronavirus pandemic.
During these trying times, ATFX continues to provide regular updates to traders on how these predictions for the second quarter unfold.
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