Daily round-up: gold and oil rise as currencies and stock markets dither

The yen sinks, the dollar rises and gold hits an all-time high against the euro


Attempts by China to boost its economy through fiscal intervention, a drop in new coronavirus cases at the centre of the outbreak and supply concerns in Venezuela and Libya all helped push oil prices higher.

Brent crude futures were up 0.68 per cent at $59.52 a barrel by 5pm GMT. West Texas Intermediate (WTI) crude futures climbed 1.16 per cent to $54.11 a barrel.

Gold hit an all-time high against the euro and is strong against the US dollar as demand continues to rise, being seen as a safe haven as fears over the final impact of coronavirus remain uncertain. At 5pm it was trading at $1,609 an ounce.

If gold is rising, then it follows that currencies will wobble. The yen had a bad day down against the pound, euro and dollar. The dollar was up against all three. The biggest change was the yen/dollar price which shifted nearly 0.5 per cent.

If evidence were needed of the impact that the virus outbreak is having on global markets, then European stocks can provide it. Company news may have driven the indices down but it was on the back of virus-led caution. The STOXX 50 slipped 1.09 per cent as China revised how it counts daily infections.

The CAC was down 0.8 per cent partly due to Air France-KLM shares dropping nearly 3.5 per cent as the airline said the coronavirus will cost the airline between €150m and €200m by April. Shares in insurance and pensions company AXA fell 3.47 per cent as the French firm reported a profit below expectations due to restructuring costs.

The DAX and IBEX 35 also traded down 0.91 per cent and 1.51 per cent, respectively.

On the face of it, the FTSE should have performed better than it did, closing down 0.27 per cent at 7,436.64.

The UK’s shopping stats showed sales rose 0.9 per cent in January after a 0.5 per cent monthly decline in December, evidence of renewed consumer confidence.

Medical equipment manufacturing giant Smith & Nephew reported revenues of more than $5bn for the first time in its history which translated to a 7.26 per cent rise in its shares.

House builders saw falls following yesterday’s across-the-board rises after HSBC tipped the sector to be a big winner in the post-Brexit economic boost.

FURTHER READING: Is gold a good investment? Five ways to buy it – the pros and cons

FURTHER READING: Oil price predictions for 2020 and beyond

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