After four consecutive days of gains on the European stock exchanges, the trend ended up reversing last Friday, February 7th. One of the main reasons that contributes for this drop is the concern about the coronavirus.
After a few days when the Chinese initiatives prevented the negative effects of the virus and contributed to the gains on the main international markets, now it has prevailed the feeling of uncertainty. The number of cases rose steeply, and industrial production data in Germany fell far short of expectations. Consequently, the main European stock index drop as well as the interest rates on the debt of the main European countries. The euro depreciated 0.17% against the dollar, where good data on the American labor market also ended up putting pressure on the European currency.
The pound sterling, when compared to the euro, was mostly growing in value on Friday with the bad results of German manufacturing. Then it ended up correcting with a greater demand for safer European assets.
Also following the same logic regarding the spread of the coronavirus, the price of crude oil fell for most of the day. The lack of definition regarding the cut in the supply of 600 thousand barrels per day by OPEC and Russia contributed to the fact that the price trend had been falling over the week. A final decision is expected over the course of this week.
Regarding gold, on the other hand, an upward trend could be observed with the rise in demand of investors for safe haven assets.
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