stock exchanges collapse and dollar skyrockets

The stock exchanges they started the week with heavy losses around the world, while the prices of the dollar and gold rise in fear of investors by the increase in the number of cases of coronavirus outside of China, despite the imposition of greater mobility restrictions.

This morning, the Mexican stock exchange reports a 1.9% drop to 43,967 points, the lowest level since the end of last year.

In the United States the losses are more pronounced, with the Dow jones down 3%, the Nasdaq 3.3% and Standard & Poor’s 2.8%, while in Europe the main German index sinks 4.2% and the English 3.5%.

The dollar reaches the highest level of the year, when sold this morning at 19.45 pesos in windows of CitiBanamex, a rebound of 27 cents compared to last Friday.

Meanwhile, spot gold is approaching $ 1,700 per ounce, the highest price in the last seven years.

Banorte analysts relate the stock market falls and the rise of the dollar with the renewed wave of aversion at risk among investors, due to the significant increase in the number of cases of coronavirus outside of China

In particular, the virus It has been presented in more than 30 countries, with Korea of the South reporting a rebound in the number of diagnosed and increases in Iran. The first cases were also registered in Afghanistan, Bahrain and Kuwait. Meanwhile, in Italy it was declared the closure of an area with about 50 thousand people near Milan, also reporting five deaths.

Also read: WHO: the world must prepare for an “eventual pandemic” for a new coronavirus

In Banorte they highlight the lack of details about a possible coordinated action of the central bankers Y finance ministers gathered within the framework of G20 this weekend.

In addition to fear for the economic consequences of coronavirusanalysts of Base Bank they estimate an increase in the perception of risk over Mexico, given the possibility of greater measures being implemented fiscal surveillanceafter the Secretary of Finance noted that the use of Budget Income Stabilization Fund (FEIP) can be avoided with the measures being implemented by the Tax Administration System (SAT) for the collection of taxes on “large companies”.

He also reads: China probably avoided hundreds of thousands of coronavirus infections: WHO

The possibility of greater fiscal surveillance it can generate uncertainty and therefore discourage fixed investment and affect the valuations of Business listed on the market of capitals, as well as economic growth, they exhibited this morning in Base Bank.

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