Australian money

Oil prices plunge on ‘recession fear’, ASX will fall as Australian dollar hits two-year low

Australian stocks are set to fall sharply today, while oil prices are down more than 9 percent amid growing fears of a global recession and lockdowns in China that could dampen demand.

ASX futures fell 1 percent to 6,477 points at 8:50 a.m. AEST.

The local stock market is likely to follow a global sell-off, with European markets falling 2.1 percent as rising energy prices fueled inflation concerns and also sent the euro sinking on recession concerns.

The Euro STOXX 600 index for the entire continent experienced its worst session in more than two weeks, as markets in Germany, Britain and France fell 2.7 to 2.9 percent.

On the other hand, Wall Street suffered heavy losses earlier in the session, but was able to recover at the closing bell.

The Nasdaq Composite closed 1.8 percent higher at 11,322 points, despite the day starting sharply lower. The S&P 500 rose 0.2 percent to 3,831, after falling 2 percent intraday.

The Dow Jones index ended 0.4 percent lower at 30,968, still a big improvement from its 1.8 percent drop at its lowest point.

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Spot gold fell 2.3 percent to its seven-month low at $1,767.05 an ounce.

Copper fell to $7,670 a ton, its lowest level in 19 months.

Huge losses for Australian dollar and euro

At an overnight low, the Australian dollar fell to 67.62 cents, its weakest level in more than two years.

It last traded at 68 cents on Wednesday morning, which was a steep drop of 1 percent.

The euro fell to its weakest level against the US dollar in nearly 20 years, amid growing concerns about a European energy crisis and recession.

The euro-zone currency fell nearly 1.8 percent against the dollar overnight to $1.02, the weakest since December 2002.

Meanwhile, the US dollar index, which measures the US currency against a group of major currencies, has risen 1.4 percent, after reaching its highest level since December 2002.

The US dollar is seen as a safe haven in times of acute economic uncertainty.

“Demand for the safety of dollar-based assets is increasing as expectations for economic activity are significantly lower,” said Shawn Cruz, chief trading strategist at TD Ameritrade in Chicago.

‘Panic liquidation’ in oil markets

Brent oil futures plunged 9.5 percent to $102.73 a barrel.

US West Texas Intermediate crude fell 8.2 percent to $99.50 a barrel.

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