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European stocks retreat on Fed Powell’s warnings

European stocks retreat on Fed Powell’s warnings

European stock indexes fell early Thursday, following warnings from Federal Reserve Chairman Jerome Powell about the economy and the impact of the Corona virus on it.

As of 09:44 GMT, the Euro Stoxx 50 index dipped 1.73 percent to trade near 2,761.95 points.

German DAX 30 index dropped 1.55 percent and now settles near 10,379.93 points, while French CAC 40 reached 4,262.54 points, down 1.90 percent.

Britain’s FTSE 100 Index descended to 5,768.51 points, bringing its slump today to about 2.29 percent.

The negative performance of European financial markets comes after Federal Reserve Chairman Jerome Powell warned yesterday that monetary policy makers may have to use additional policies to pull their countries out of an economic impasse that has led to the loss of at least 20 million jobs and yielded in a very bad economic situation.

Powell said that although the economic response was timely and adequately significant, it may not be the last, and the future is unstable and likely to be subject to significant lower risks.

He stressed that the scale and speed of the current downward trend in economic activity did not set a recent precedent, but was much worse than any recession since the Second World War.

"We are currently witnessing a sharp decline in economic activity and employment, and the employment gains of the past decade have already been wiped out," he said.

According to the monthly jobs report, the US labor market saw the loss of about 20.5 million jobs in April, an unprecedented pace in the country's history.

Later in the day, the U.S. initial jobless claims for last week may witness an increase by 2.5 million, following 3,169,000 a week earlier.

At press time, the EUR/USD pair fell today, reaching 1.0808 levels, while the pair opened today’s session at 1.0820. It is also noted that the lowest level reached by the euro today was at 1.0797.

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