Foreign Exchange Market: Chinese Virus, Yuan and Yen

Foreign Exchange Market: Chinese Virus, Yuan and Yen

Let’s check the situation in the international exchange market. The yuan fell to 6.8916 per dollar in the onshore market. It is the lowest level in almost a week. It dropped to 6.8886 in the offshore market.

The decline of the stock market pushes up the yen. Chinese coronavirus in Wuhan raises some concerns.

Regarding the policy tone, traders await more details from ECB, BOJ.

On Tuesday, the yen pulled ahead against the dollar. Nevertheless, the yuan fell against the dollar. In China, a sudden bout of risk aversion was sparked by the spread of the pneumonia-like virus. The virus sent Asian stocks skidding.

In onshore and offshore trade, the yuan slipped against the United States currency. China confirmed the fourth death from the illness. Moreover, the Chinese health expert said the virus could pass from person to person.

The virus has spread from the central city of Wuhan, although the disease is still in its early stages. Nevertheless, it is currently the pre-peak of travel season during the Lunar New Year holidays. It raises the risk for the virus to spread further.

Chinese Yuan and Virus

The foreign exchange strategist at Daiwa Securities in Tokyo is Yukio Ishizuki. He said that there was a sharp fall in Hong Kong stock futures. It rippled through the currency market and pushed up the yen.

yuan

He thinks that it is too early to be sure that the Chinese virus triggered these movements.

On Tuesday, the yen edged higher 0.15% to 110.01 per dollar.

Against a basket of six major currencies, the dollar index stood at 97.598. It was near its highest level in a month.

The Japanese traders’ full attention was towards the meeting of Japan.

On Tuesday, the two-date rate review ends. Most probably, the BOJ will set to keep its short-term rate interest rate target at minus 0.1%. It pledges to guide 10-year government bond yields around zero.

These are the leading market updates for today.

Comments Rating 0 (0 reviews)