Fear of coronavirus supports risk-off sentiment

News that more nations are struggling to curb the coronavirus is causing markets to shift to risk-off. The US dollar and Japanese yen have outperformed their peers on further signals that the virus is spreading. Reports out of Italy showed Europe’s biggest surge in infections.

Monday: US Chicago Fed Nat Activity
Wednesday: US New Home Sales
Thursday: US Durable Goods Orders, US Initial Jobless Claims
Friday: France CPI YoY, German CPI YoY, Canada Quarterly GDP Annualized

  • FX Rates
    February 24, 2020

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    The US dollar is outperforming its peers on continued fear of the coronavirus affecting the global economy. The Bloomberg Dollar Index rose to its highest levels since October on Friday.

    GBP
    Sterling dropped below 1.29 as markets moved to price in a 25 basis point rate cut at the Bank of England’s meeting in November. Previously, the markets were expecting that the central bank would hold rates through 2020.
    EUR

    EUR/USD fell slightly, trading right above the 1.08 handle. The common currency weakened as core european bonds surged as risk-off sentiment strengthened following a virus outbreak in Italy.

    CAD

    Fear that the coronavirus would result in a global growth slowdown caused the Canadian dollar to weaken. USD/CAD is up 0.5% trading at highest level since February 11.

    ASIA/PACIFIC

    The Japanese yen strengthened from its weakest levels since May, leading the G-10 currencies. The yen fell to low levels last week on fear of a recession in Japan. AUD/USD fell to its lowest levels since March 2009. The Australian government may have to consider coordinating fiscal stimulus if global growth does not rebound.

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Cate Camerota
WRITTEN BY
Cate Camerota

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