Stock markets resume their rollercoaster ride amid global developments
The final trading week of 2018 has been explosively volatile and wildly unpredictable due to geopolitical risks.
Global sentiment repeatedly swung from extremely bearish to bullish this week as investors tussled with concerns over slowing global growth, US-China trade developments, Brexit-related uncertainty and a partial US government shutdown.
Although US stock markets bounced back to life on Thursday to end positive and Asian shares traded mostly higher Friday morning, it is certainly too early for any celebrations. With investor appetite for riskier assets seen diminishing amid the unfavourable market conditions, equity markets remain vulnerable to downside shocks. The geopolitical risk factors weighing painfully on global sentiment are likely to encourage investors to seek safety in the Japanese Yen and Gold. slowdown in economic momentum.
Concern over a partial US government shutdown compounded to the Greenback’s woes with the Dollar Index trading marginally below 96.45 early Friday. With slowing growth fears threatening the Dollar’s safe-haven status, the sentiment pendulum could swing in favour of the bears in 2019.
As regards the technical picture, the Dollar Index is shaky on the daily charts with prices trading below the 96.50 support. Sustained weakness below this level has the potential to open a path towards 96.00 in the near term.