Trade-exposed Asian currencies like the Australian dollar edged ahead supported by optimism that the coronavirus spread had slowed.
News about the slowdown in the coronavirus spread had currency markets stabilising after a steep sell down of China-exposed assets. However, concerns over the virus impact on the global economy persisted.
Across mainland China there were 2,015 new confirmed infections as of Tuesday, the lowest daily rise since Jan. 30. China’s senior medical adviser also said the outbreak might be over by April.
Oil prices, a barometer of global energy demand and so of growth, remain nearly a fifth lower than they were before the outbreak.
The Australian dollar, sensitive to China’s fortunes because of Australia’s commodity-driven export profile, firmed 0.3% to $0.6728.
Further, the kiwi leapt after the central bank dropped its easing bias.
China’s virus epidemic may peak in February and then plateau before easing, the government’s top medical adviser on the outbreak said.
The US Federal Reserve Chair told Congress the U.S. economy was in a good place but warned that the virus outbreak may have some impact on the U.S. economy.
START TRADINGForex – Coronavirus spread slows, kiwi firms
Levels have stabilised rather than recovered, pointing to plenty of caution remaining. Investors remained wary of the epidemic’s economic impact.
The US dollar rose to four-month highs against a basket of currencies, then slipped on Wednesday.
The Japanese yen slipped 0.3% to a three-week low against the dollar..
Recession fears in Europe also dragged the euro to a four-month low overnight, though it has since recovered by about 0.2% to $1.0916.
The day’s big currency mover was the New Zealand dollar which jumped 0.8% to $0.6462, its sharpest rise in two months. The central bank dropped a reference to further rate cuts, suggesting its easing cycle might be over.
The British pound sat at its highest in a week after fourth-quarter growth beat sluggish forecasts.
In commodities, Oil prices extended gains on Wednesday as investors’ risk appetite picked up on reports of a decline in new coronavirus cases.
Brent crude was up $1.13, or 2.1%, at $55.14 per barrel at 1118 GMT. U.S. WTI rose 82 cents, or 1.64%, to $50.76 a barrel.
Gold inched down to a near one-week low as investors’ risk appetite picked up on reports of a decline in new coronavirus cases.
Spot gold was down 0.1% to $1,566.31 per ounce at 1059 GMT, having touched its lowest since Feb. 6 at $1,561.16 earlier. U.S. gold futures were flat at $1,569.60.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money