Against the greenback, Scandi currencies, and the Euro fall. The most significant move was in the Yuan versus the U.S. dollar.
There are fears that last year’s United States-China dispute will restart. On Monday, the United States dollar surged against most major currencies. Nevertheless, this time it was due to fears reacting to the novel coronavirus.
Moreover, Secretary of State Mike Pompeo and the United States President Donald Trump pinned the blame for a pandemic on China. The world believes that the new coronavirus outbreak originated in China.
On Sunday, the latest salvo came from Pompeo. He said that there was a considerable amount of evidence that the virus emerged from a laboratory in Wuhan, the central city of China.
Simon Harvey is a currency analyst at broker Monex Europe. He said that risk-averse trading dominated this morning’s session. This was because investors are weighing the negative consequences of global growth from another escalation in China-U.S. tensions.
Moreover, Harvey said the headlines of supply-chain disruptions and further tariffs come at a time where expectations of global growth are very fragile.
Thus, it caused currencies such as the euro and sterling to trade on the back foot this morning. Nonetheless, this was despite exit measures set to be implemented or announced in their respective economies.
Sterling was down by 0.4% to $1.2442. The euro was last also down by 0.4% at $1.0932.
Meanwhile, the dollar was also rising against Scandinavian currencies. Moreover, the Scandinavian currencies are very vulnerable to the risks of global trade. Against the United States dollar, the Swedish crown was last down by 0.6%. Nonetheless, the Norwegian crown was falling against the United States dollar by 0.8% at 10.3975.
However, the Chinese yuan was the biggest mover in the currency markets. Thus, in the offshore market, against the United States dollar, it fell to a six-week low of 7.1555.
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