Black Thursday Market Crash Sees Pound Down 2%, Euro Plunge, Bitcoin Lose 40%, Dollar Regain Safe Haven Status


– The Pound to Euro exchange rate is 0% higher @ €1.12437 on 13.03.2020

– The Pound to US Dollar exchange rate is 0.06% higher @ $1.2581 on 13.03.2020

– Bitcoin price crashes 40% to trade at $4039 early hours trade on Friday.

Pound Sterling (GBP) Exchange Rates

The Pound to Dollar exchange rate (GBP/USD) is back in free-fall as it dropped sharply to the bottom of the 1.25 handle on Thursday.

A rate cut on Wednesday is no help for the British Pound exchange rates, but it was probably a dramatic fall in the Euro that hurt cable the most. Boris Johnson announced that he anticipates the coronavirus will not peak for a few months, which is particularly alarming given how strongly a foothold it is already taking.

The Premier League is on hold after Arsenal’s Mikel Arteta tested positive for COVID-19, which is no small economic hit as well as a significant morale blow to the beating heart of the nation.

Pound Sterling’s fundamentals were not great before the coronavirus, and they certainly aren’t improving now.

“GBP was the worst hit currency” says Marshall Gittler, analyst for BDSwiss on Friday. “Probably it’s because the UK government has apparently abandoned efforts to contain the spread of the virus and is simply trying to delay the peak.So far it hasn’t taken measures such as closing schools or banning sporting events, as has happened in other countries. Maybe they think this is a good way to solve their pension crisis? The government is arguing that there’s no point implementing such measures too early, but the markets don’t seem to agree. This insouciant response follows a Budget package that failed to impress the markets, leaving investors with the feeling that the UK government just doesn’t get it yet. The market thinks that the Bank of England is maybe more on top of things and investors are forecasting another 10 bps cut in the Bank’s base rate next week, which would bring it down to a new low 0.15% or so (it’s now at the record low of 0.25%).”

Euro (EUR) Exchange Rates

It would appear that risk-off being positive for the Euro might be over. the EUR/USD exchange rate dropped sharply on Thursday March 12 as the continent endured a horrific stock market crash.

Triggering this appeared to be the ECB’s decision not to cut interest rates, as Christine Lagarde’s first major test did not go well as both equities and the Euro fell in unison. This may be all part of a decision to try and compel fiscal actions from the member states, but this is definitely a glass half full view. .

US Dollar (USD) Exchange Rates

The US Dollar was weak overnight as U.S. stock market futures plunged, but correlations are breaking down, and the greenback was actually able to rise against the Japanese Yen, as an even more fragile JPY fell with the price of gold.

These moves are likely from expectations that the Fed will simply cut to zero at its meeting this month, which is eroding its interest-rate advantage against its trading partners.

B.K. Asset Management’s Kathy Lien noted the major intervention that the Federal Reserve made midday, did not have a positive impact on the stock market, noting that it was more of a structural move than to move equities or impact the value of the USD,

“At first, equities soared on the back of the Fed’s $1.5 trillion liquidity announcement but sellers returned quickly to drive equities sharply lower because these liquidity measures are aimed at normalizing market operations and not stimulating the economy.For example, the Fed will widen the range of its Treasury purchases across different maturities and will offer $500B liquidity through 3 month and 1 month operations. All of this helps to relieve the bond market but none of it helps the bottom line of businesses and consumers”

“Amidst all this turmoil, USD finally regained its stature as the ultimate “safe haven” currency” says Marshall Gittler, analyst for BDSwiss on Friday, march 13. “The gains were particularly noticeable against emerging market currencies, which fell almost across the board against USD.”


Image: Currencies performance index 12 to 13 March 2020 – via Gittler

The Australian and New Zealand Dollars both rallied as the American Dollar sold off, this was despite the fact that stocks continue to crash, which is typically not good news for the Antipodean currencies.

The Chinese Yuan is back above 7.000 against the USD.

After a big slide in the price of oil, USD/CAD is rising rapidly, now approaching 1.40.

Stock market crash 2020

“There’s bad, and then there’s really bad, and then there’s this” says Gittler. “This is just a whole new level of bad. The US stock market had its worst day since 1987, How many of you remember 1987? And Europe had an even worse day. Even after yesterday’s collapse, markets are down further in Asia this morning, with some markets showing double-digit declines at some point. Clearly this is going to be a very, very unlucky Friday the 13th!

“The scariest part of this is not the collapse in the stock markets, even though it’s the fastest reversal on record from record top to bear market. It’s the drying up of liquidity in the US Treasury market. The US Treasury bond market is supposedly the most liquid of the financial markets (except the FX market). Yet yesterday there were reports that there was diminishing liquidity in important sectors of the market. That’s unprecedented. Also the fact that Treasury yields moved higher even while the stock market collapsed shows a general move into cash, the ultimate “risk-off” move.”


As of Friday, March 13, there have been 134,829 confirmed cases and of 75,379 closed cases, 70,395 have recovered with 4,984 (7%) deaths. Source:


Image: Forex calendar 13/03/2020

There isn’t a lot of economic data today, as Europe releases plenty of inflation data in France, Spain, and Germany.

Later in the afternoon, the U.S. releases Michigan consumer sentiment is expected to have dipped sharply this month. All these releases will pale in significance to the headline risk from the coronavirus.


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