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UK economy contracted its biggest fall since the 2008 financial crisis in the January-March period, with March GDP falling by a record pace due to the coronavirus pandemic. The GDP dropped 5.8% in March, the biggest monthly fall since the series began in 1997. While quarterly GDP beat projections, falling by 2% instead of the expected contraction of 2.5%.


Asian shares tumbled as fears about the second wave of coronavirus infections gripped financial markets. Wall Street fell on Tuesday after Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, warned Congress that a premature reopening could set back the US attempts to control the disease. The Dow Jones Industrial Average fell 1.89% on Tuesday, the S&P 500 lost 2.05% and the Nasdaq Composite dropped 2.06%.


Crude oil prices declined on worries about a possible second wave of coronavirus cases in countries starting to ease lockdowns and API data showed that US crude inventories rose by 7.6 million barrels in the latest week, a higher climb than the 4.1 million barrel build forecast by economists.


The dollar index trading unchanged after U.S. President Donald Trump again pushed the Federal Reserve to adopt negative interest rates. The New Zealand dollar slumped to a six-month low after the country's central bank doubled its quantitative easing program and said it has asked commercial banks to be ready for negative interest rates by year's end.


Gold gained on Wednesday as concerns that the second wave of coronavirus infections may be emerging in many countries weighed on riskier assets.

Economic Outlook

On Tuesday, FOMC members – including St. Louis Fed President James Bullard and Chicago Fed President Charles Evans – commented against the idea of negative interest rates.

The RBNZ kept rates steady and expanded its QE size while leaving doors open for negative interest rates. The RBNZ said at its May meeting that is prepared to use additional monetary policy tools if and when needed, including reducing the OCR further, suggesting openness toward negative interest rates in the future.

Today the investors will closely watch the US Federal Reserve Chairman J. Powell due later on Wednesday at 1300 GMT.

Coronavirus Update:

The number of people infected with the coronavirus across the world surpassed 4.3 million, of which at least 293 thousand people have died and 1.6 million people have recovered. Russia passed the UK and Italy and has now over 242 thousand confirmed infections. Meanwhile, Beijing reported 7 new cases of the disease.

Technical Outlook

Gold price trading above $1700 ahead of FED Powell speech.

The important levels to watch for today: Support- $1690 and $1680 Resistance- $1712 and $1720.

EUR/USD: The pair currently testing the short term support 1.0830, any break below this level will open 1.08 and 1.0780.


The important levels to watch for today: Support- 1.0800 and 1.0770 Resistance- 1.0890 and 1.0930.

Quote of the day: Success investing is about managing risk, not avoiding it – Benjamin Graham.