- EUR/JPY surrenders gains as US stock futures drop.
- Covid-19 fears and host of other factors keep risk assets under pressure.
The bid tone around the anti-risk Japanese yen strengthened, pushing the EUR/JPY back to the daily opening rate of 120.43 from the session high of 120.57 after the US index futures resumed the overnight decline/
The futures tied to the S&P 500 are currently trading 0.70% lower on the day at 3,027. An hour ago, futures were up 0.20%, having printed lows below 3,000 during the early Asian session.
Investors are shunning risk in response to the rising number of coronavirus cases in the US, the world’s largest economy, renewed US-EU trade tensions, and downward revision of growth forecasts by the International Monetary Fund (IMF).
The global body now estimates a contraction of 4.9% in the world’s gross domestic product in 2020 compared to a 3% decline projected in April. The fund has also downgraded its GDP forecast for 2021 to 5.4% from 5.8%.
These factors weighed over US stocks on Wednesday, pushing the Dow Jones Industrial Average lower by more than 600 points and are likely to keep risk assets under pressure on Thursday. Additional bearish pressure around global equities may emanate from potential quarter-end rebalancing into bonds from equities.