Rating agency Moody’s believes the situation after Brexit is not optimistic
Rating agency Moody’s expects that if the UK leaves the EU without a deal at the end of 2020, the size of the UK economy will be significantly lower than the current expected level. However, the impact of the epidemic on the economy may still be the main driver of UK credit risk in the coming years. As the UK’s fragile economic recovery progresses, Brexit without agreement will exacerbate the impact of the epidemic. On the other hand, Britain and Europe seem to be unwilling to compromise, and Secretary of the Cabinet Office Goff said that the possibility of extending the Brexit transition period was ruled out. At the same time, French lawmakers urged the French government to maintain a firm position on the fishery issue in the Brexit negotiations.
The short-term attractiveness of gold will decline
The expected cooling of the rapid economic recovery on Thursday and the risk of the second spread of the epidemic made US stocks plunge. However, as the US dollar has fallen by more than 3.5% in the past half month, risk aversion has caused funds to flow into the US dollar, so gold rushed back down. Some institutions believe that as the market realizes that the current risk of deflation is higher than the risk of inflation being out of control, the attractiveness of gold as a hedge against inflation will decline in a short time. However, the latest data shows that investors continue to flow into gold ETFs, and ETFs attract long-term investors, which means that the pattern of gold long-term growth has not changed.
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