Appetite for risk-off wanes as China announces nationwide screening for virus; Sterling strengthens on positive data
The markets move away from safe haven assets following news out of China that the country will be conducting nationwide screening to contain the new deadly respiratory virus. Data out of the UK shows that business optimism is better-than-expected causing the currency to appreciate almost 1%.
January 22, 2020
EUR/USD 1.1086 GBP/USD 1.3137 USD/CAD 1.3048 AUD/USD 0.6849 USD/JPY 109.9000 USD/CNH 6.9040 USD/ILS 3.4594 USD/MXN 18.6967 USD/CHF 0.9693 USD/INR 71.1975
The US dollar remains steady. President Donald Trump stated in interview with CNBC “I want this dollar to be strong. I want it to be so powerful. I want it to be great. But if you lower the interest rates, so many good things would happen.”GBPData released showed better-than-expected for business optimism. GBP/USD strengthened almost 1% trading around 1.3150. Sterling has erased losses since Bank of England’s governor Mark Carney spoke on January 9.EURReports showed that a leader of Italy's anti-establishment Five Star Movement, Luigi Di Maio, is about to resign - causing Italian bonds to decline. In reaction to this, EUR/USD dropped to lowest level since December 25 trading at 1.1075. The currency pair has slightly rebounded from the low.CAD
The Canadian dollar is stronger than most of its peers ahead of the Bank of Canada rate decision due to be released this morning at 10am. The expectation is for officials to hold rates unchanged.ASIA/PACIFIC
China announced nationwide screening to contain a deadly new respiratory virus which caused demand for haven assets to wane. In reaction to risk-on market sentiment the Japanese yen has weakened.