Home Forex Asian Currencies Witness Slide as WHO Raises Concern Over Coronavirus

Asian Currencies Witness Slide as WHO Raises Concern Over Coronavirus

Asian currencies’ arrest slide as WHO’s confidence in China’s Virus response raises worries regarding the resiliency of infections. This Thursday, WHO released a statement saying that the outbreak of the virus was an emergency worldwide and the response of China observed would reverse the tide of the spread of the virus’.

The data that demonstrated the activities of Chinese services taking pace this month was sufficient to halt trading from investors that wait for further information regarding the epidemic to gauge its possible human and economic loss. Deaths due to virus reach 213 in China while the cases of infection reach 9,692, which is a sharp rise from 7,711 just a day before. Though the Australian & New Zealand currencies recovered due to the services data after facing a plunge, Chinese yuan faces a little fluctuation of around 6.9793 a dollar.

We think the impact will be particularly frontloaded and likely larger than that of the SARS outbreak,” said a BNP Paribas economists in a statement that the year-on-year growth of the current quarter figure in China might come under 5%.

We do not know exactly how the situation will evolve over the coming days, weeks and months and therefore what the duration of the shock will be. The risks appear skewed to the downside, with scope for potentially harmful mutations of the virus due to a large (and rising) number of infected individuals.

The Antipodean currencies are pounding for the last ten days, while investors liquefy the assets exposed to china’s virus’ fallout. The Aussie stands 4.1% weaker and will see the worse if the selldown does not reverse this month.

Ray Attrill, Head of FX Strategy at National Australia Bank said that,

Aussie and kiwi are what I’ve called the whipping boys, if you like, for expressing concern about the spreading of the virus and its potential global economic ramifications.

Over 50 million headcounts that exist in Hubei province, the inception point of the outbreak, are surviving in a virtual lockdown. A number of global airlines that fly to China’s mainland are stopped while economists slash their projections of Chinese growth. Though yen had been steady and stood at 109.00 per dollar while the dollar remains stable at $1.1030 a euro.

Opposed to the Australian dollar, yen adds another 3.2% for 10 days ever since the concerns regarding the virus started toiling the markets and against Korean currency, the yen gains around 4%. Whereas Thailand that remains dependent on Chinese tourism has its currency stubbornly resisting days of leveraging its position and central bank’s ease of policy shed 4% this month.

Chris Weston, the Head of Research at Melbourne brokerage Pepperstone said that

The problem for markets is the inability to price risk because lack of certainty around this. We’re probably going to hear a much clearer definition about how this is contained somewhere between the 3rd and 8th of February.

David Pender
David Pender
David is a journalist interested in writing news-stories regarding forex. He has been in forex industry since 2014. he recently, joined our team as a news writer. He studied mass communication and has 7+ years of experience. He is an avid trader. He can be reached by email: david@forexnews.world.

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