Forex traders and analysts have warned that the global financial system may be on a “fiery swing” following the US elections and the prospect of the Brexit talks.
Forex markets in London have been volatile in the past with a sharp spike in volume on Monday, while the Dow Jones Industrial Average lost almost half its value.UK markets also were down, with the S&P 500 index and the Nasdaq falling.
In Beijing, the Shanghai Composite Index fell 0.8% and the Shenzhen Composite fell 0 .7%.
“We are currently at the lowest level since the financial crisis,” said Yuen Long, managing director of the Chinese Forex Research Institute.
“The outlook for financial markets is extremely precarious.”
Forex traders have already warned of the potential risks to the global economy after the US election results and the UK vote to leave the European Union.
Forex trading has been a major source of uncertainty in the world’s second-largest economy since the election of Donald Trump in November, when his party gained the presidency.
The markets have been highly volatile over the past few days, with traders selling stocks, banks and other financial institutions amid a sell-off in equities, bond yields and the euro.
“In the past two weeks, the global markets have become more volatile than at any time in the history of the financial markets,” said Liu Guiyun, managing partner of the Forex and Investment Research Centre in Shanghai.
“This has caused financial institutions to withdraw capital and the global market to deteriorate.”
ForeX futures, a global trading tool, fell as much as 6.5% on Monday after the Dow fell more than 3,000 points on Monday.Reuters