Risk sentiment shifts on news confirming additional coronavirus cases
News from China reported that a revised methodology to diagnose the coronavirus has caused the number of confirmed cases to soar. The market reacted to this news by shifting towards risk-off. Currency moves of note include the Canadian dollar (lower) and the Japanese yen (stronger). UK Chancellor of the Exchequer resigned causing the British pound to trade higher.
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February 13, 2020
EUR/USD 1.0859 GBP/USD 1.3028 USD/CAD 1.3245 AUD/USD 0.6737 USD/JPY 109.816 USD/CNH 6.9809 USD/ILS 3.4191 USD/MXN 18.6355 USD/CHF 0.9785 USD/INR 71.2560
Data out of the US showed that continuing jobless claims fell more-than-expected and US consumer prices hit 2.5% vs. the expectation of 2.4%. The US dollar initially fell ahead of the news and has since pared losses.GBP
Sterling rallied following the resignation of Chancellor of the Exchequer Sajid Javid. Rishi Sunak will replace Javid which led to talk of increased government spending. Markets are speculating that the UK could move towards more fiscal stimulus.EUR
EUR sank to its lowest level since 2017, falling below the 1.09 handle. The combination of concern regarding the succession plan of German Chancellor Angela Merkel and a dovish European Central Bank has caused the common currency to weaken.CADThe Canadian dollar weakened on news of coronavirus cases significantly increasing. China stated that revised methodology to diagnose the virus has resulted in the number of confirmed cases rising.ASIA/PACIFIC
The Japanese yen hit highest levels since January 21 following news of increased cases of the coronavirus. USD/JPY stalled around 109.80 as investors await more details.