US dollar fell since the start of the weekly trading with the increase in expectations about spreads of Coronavirus on the pace of growth of the global economy and US economy by cutting interest in the second half of the year twice. Markets priced at 46% to cut interest at the June meeting by 25 basis points, compared to only 24%, by keeping them unchanged, so that there will be another cut in the September meeting.
It appears that the effects of the Coronavirus will begin to appear on the global economy as a whole, and with the approaching end of the first quarter of the year, concerns that support the possibility of entering the global economy to the stage of recession escalated in the first half of the year unless governments succeed in responding to this virus and follow strong stimulus measures that support economic growth during the next period.
Those expectations come after Fed began to cut interest rate again in 2019 three times to support the economic growth and Fed Governor Jerome Powell indicated that it is a preventive measure to maintain the strong pace of US economic growth.
Thus, with real risks at the beginning of this year, Coronavirus outbreaks and global demand fell, it makes markets almost certain that the decision to cut interest will be reality in the end, especially if the risks of the Coronavirus continue to penetrate into the second quarter of the year.
It is expected that Fed will restore its economic forecasts in 2020 during its next meeting on March 18, with the bank stressing that the US economy will undoubtedly be affected by the outbreak of the Corona virus, but it may be too early for the bank to address the rate cut in March, as it is preferred to This decision is postponed until next June.
Gold fell during today's trading due to profit taking operations, after recorded in yesterday its highest level since the beginning of 2013 at $1689 an ounce, and gold is expected to give up some of its gains with the positive momentum on the MACD retreating before purchasing support returns to control again the trades.
In general, our positive expectations remain valid for gold as a safe haven with the escalation of fears caused by the outbreak of the Corona virus and the increase in deaths in Italy and Iran, and it may head to levels of $ 1700 per ounce in the coming period.
As for oil prices, it seems that the selling pressure will be dominated in the coming period with the decline in global demand for it, especially China due to the Coronavirus and the closure of many factories and stores in China, which is the largest oil consumer, and therefore it may return to the support levels at 49.45.
