US Dollar Steady, Virus Risks in Focus
The US dollar stood steady against the Japanese yen on Wednesday as the World Health Organization (WHO) reiterated that the coronavirus spread could be contained.
The USD/JPY pair was trading at 109.62. After the yen fell with the gold, bonds, and other safe-haven assets overnight in its worst session in six months.
The dollar index, which monitors the greenback against a basket of six major currencies, rose by 0.04% to $98.00, before easing to trade at $97.94.
The US currency posted slight gains overnight as the forex market received some support from a better-than-expected factory orders data.
New orders for US-made products inched up by 1.8% in December. Marking as the largest growth since August 2018, the Commerce Department reported on Tuesday.
The figure also surpassed economists’ estimates for a 1.2% surge.
Coronavirus Risks in Focus, WHO Says Outbreak Control Possible
The coronavirus outbreak remained in the spotlight as the death toll in mainland China climbed to 490. While confirmed cases rose to 24,324, according to Chinese authorities.
The WHO, though said the virus outbreak could be contained. Pointing out that 99% of the confirmed cases are in China so far.
Yet with over 99% of the cases confined to China, major quarantine measures carried out, and the country’s central bank is injecting about CN¥1.7 trillion ($243 billion) into the financial system. Fx market players have not completely undone their recent flight to safety.
The WHO’s comments made a slight impact on the yuan. The US dollar shed 0.1% to 6.9863 against the Chinese currency. The yuan acts as a barometer of the forex investor’s view of the outbreak.
The Singapore dollar also dropped to a four-month low, after the Monetary Authority of Singapore (MAS) stated that there is sufficient room for policy easing if the coronavirus hits the economy.
The currency last stood at 1.3802 per greenback.
Its liquid trading ability means that the fx markets may be expressing a lot of regional views via the Singapore dollar, according to the head of economics Vishnu Varathan.
Varathan added that it is a good barometer for them, to let them know that risks are not in the rear-view mirror, and they are probably at the traffic-light junction.
One of the reasons the coronavirus has caused so much concern is that much remained unknown. That includes the mortality rate and transmission routes.
Its impact on global growth, on the other hand, becomes more and more apparent.
Economists see the world economy to decline between 0.2 to 0.3 percentage points as a result of the outbreak.
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