Yen Steady Amid China Infection Fears
Recently, the safe-haven Japanese yen was stable in the foreign exchange market.
On the other side, the Chinese yuan was weak in forex trading today as traders kept a cautious eye on the circulation of a virus in China.
Meanwhile, the unwell Australian dollar soared after an unexpected decline in unemployment.
Yesterday, casualties from the flu-like coronavirus, climbed to 17. A total of 571 cases have are now verified.
Moreover, Chinese state media stated overnight that means of transport to and from the city of Wuhan in central China, where the outbreak began, is to be shut.
The World Health Organization will make a decision later on Thursday whether to proclaim the condition of a global health emergency.
In a statement, Head of Research at Melbourne brokerage Pepper stone, Chris Weston said, “We’ll be taking our leads from China and sentiment on the ground.”
Weston added, “USD/CNH remains a solid guide, and I see risks if we see the cross push into 6.9150 … with the belief that the Chinese authorities will stimulate should economics be threatened.”
In a morning offshore trade, the yuan held around 6.9110 per dollar in the FX market. The measure was not far beyond a two-week low hit last Wednesday.
Meanwhile, the Japanese yen was a haven by virtue of Japan’s status as the world’s leading creditor increased by 0.1%.
It was to a two-week high-ranking of 109.65 per dollar as investors sought after protection.
Further Movement in the Forex Market
On the flip side, the U.S. dollar was steady. It was holding about $1.1093 per euro and at 97.527 versus a basket of currencies.
Elsewhere, a significant concern is the virus that may possibly spread immediately. While millions of people travel across China and the world.
In addition, the celebration of the Lunar New Year in their hometowns.
A senior FX strategist at National Australia Bank in Sydney, Rodrigo Catril, stated, “China’s efforts to be transparent is a reprieve for markets. But our suspicion is that cautiousness is likely to remain a near-term theme nonetheless.”
Catril added, “For now, it remains to be seen if China has managed to contain the outbreak, particularly given the upcoming holidays.”
Meanwhile, the Australian dollar has slumped more than a cent this year. It was as the domestic economy sheds.
However, it grew 0.5% to $0.6877 after jobs data demonstrated a sudden drop in unemployment.
In December, the figures displayed 28,900 jobs generated. The jobs were nearly double the market prospects.
They have also been encouraging a rapid loosening of bets that the central bank will cut rates next month.
Futures pricing also moved promptly from an even possibility of a rate cut to only about a 1/4 chance.
