Media report that scientists have developed a drug against the fast-spreading coronavirus boosted growth-linked currencies.
Media reported that a Chinese university had found a drug to treat people with the virus. On top of that, researchers in Britain had made a “significant breakthrough” in finding a vaccine research although trials are in initial stages.
The World Health Organization played down the media reports, saying there are “no known effective therapeutics” against the virus.
With more than 99% of confirmed cases confined to China, drastic quarantine measures in place and the central bank pouring trillions of yuan into the financial system, investors have partially unwound their recent flight to safety.
China’s response to the coronavirus outbreak raised hopes it could be contained, even as the death toll rose sharply. The mainland China toll rose by a new daily record of 65 to 490. The number of infections there hit 24,324.
However, the ECB chief warns of growing risk from coronavirus.
START TRADINGForex – Media report virus treatment breakthroughs
Reports of medical breakthroughs in the fight against the new coronavirus boosted growth-linked currencies. Traders used the headlines to load up on risky assets.
Gains for riskier currencies translated into weakness for currencies perceived as safe-havens such as the Japanese yen and the Swiss franc with both of them weakening against the dollar.
The dollar also benefited from a rebound in risk appetite with the greenback advancing 0.1% to 98.04. The US currency advanced for a third consecutive day and was within striking distance of a two-month high of 98.19 hit last week. The dollar firmed against the euro and pound.
The Japanese Yen nursed losses on Wednesday – last trading near a week-low at 109.45 yen per dollar.
The Australian dollar hopped 0.5% higher at $0.6770 on Wednesday following some hawkish comments from the central bank governor.
Britain’s pound was trading higher on Wednesday before key economic data were released. The pound was up 0.1% at $1.3043 and 0.2% higher versus the euro at 84.61 pence.
Oil prices jumped by more than 3% on Wednesday on media reports that scientists have developed a drug against the fast-spreading coronavirus. Both Brent crude oil futures and U.S. West Texas Intermediate (WTI) crude jumped by more than 3% in morning trade. By 1220 GMT Brent was up $1.35, or 2.5%, at $55.31 a barrel and (WTI) was up $1.25, or 2.5%, at $50.86.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money