FX.co ★ Trader's diary for March 11, 2020. EUR/USD. Coronavirus can cause global financial crisis

Will a new financial crisis break out in 2020 or will the global economy manage to avoid it? The answer is not clear.

However, there is a 50% possibility that a new financial crisis can begin in the coming months.

The chances for a crisis are high as the coronavirus persists and the number of infection cases exceeds 1,000 people in many countries across the world.

It seems like the coronavirus appeared at the right time. Global economy has been growing since spring 2009 accumulating internal problems which need to be resolved. Bankruptcy of several big companies and banks or default of a large country such as Italy can become a trigger for a financial crisis.

What is the main problem of the current crisis? The problem is that governments have to exacerbate economic issues in order to combat the epidemic. Nowadays, countries across the world are closing borders, putting entire cities in quarantine. Such a situation is likely to cause a decrease in demand and consumption. Industries, like air transportation service, tourism, hotel business, and catering are expected to suffer significant financial losses. Manufacturing, exports, and oil demand in China have already sunk.

Governments and central banks are expected to inject liquidity in the markets. However, can such a measure stimulate the demand growth?

The European Central Bank is expected to announce its decision on interest rates.

I hold my buy deals at 1.1100.

It is better to open buy deals at 1.1200.