On Friday, soft economic data knocked the dollar from its perch. Before that, the dollar against the basket of currencies crept back toward an almost three-year peak touched last week.
In China, the coronavirus has killed more than 2,400 people. It also accounts for 98% of global diagnoses. On Monday, four Chinese provinces lowered their emergency response measures as domestic containment efforts seem to work.
Moreover, the weekend’s spread beyond China appears to have caught authorities off-guard.
Italy has shut schools, sealed off affected towns across its wealthy North, and halted the carnival of Venice. Nevertheless, the country struggles to find out where and how the virus’ spread began.
Also, South Korea has an alarming situation. The country is on high alert and is fighting steep rises in infections. It is all adding to the already disrupted world economy.
Stephen Innes is Asia Pacific Market Strategist at AxiCorp. He said that from there on, a lot would depend on how fast China will resume production. Also, it will depend if they can rely on negative implications for supply chains and global economic growth.
Against the euro, the dollar was firmer at $1.0827. Also, it was firmer against the pound at $1.2946. Per the New Zealand dollar, it last traded at $0.6324. Meanwhile, the greenback last traded at $0.6613 per Australian dollar.
South Korea reported 52 new cases, liftings it is total national third to 156. Along with Singapore, Japan has reported further deaths and stands on the brink of recession.
Johanna Chua is an emerging market Asian economist at Citi in Hong Kong. She said that market participants are very anxious about the spread of COVID-19 in other countries now.
She also said that in Asia, the risk sentiment is deteriorating rapidly. The weakness was mostly felt in the emerging markets of Asia FX.
Per dollar, China’s tightly managed yuan is sitting at a two-month low of 7.0286.
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