Forex Today: Coronavirus spreads to markets, BOJ optimistic for a change, Trump descends on Davos
Here is what you need to know on Tuesday, January 21:
- Coronavirus: The virus continues spreading around China and markets are taking note. The risk-off environment is weighing on Asian stocks, especially after the World Health Organization confirmed human-to-human contraction and a fourth person has died. Heightened travel around the Chinese New Year may further spread the disease.
- The Bank of Japan has left its interest rate unchanged as expected and raised growth forecasts. The government's fiscal stimulus plan keeps the BOJ on the sidelines. USD/JPY has dropped on the combination of the bank's optimism and concerns about the Coronavirus.
- The UK publishes its jobs report in the European morning and economists expect another slowdown in wages, adding to the chances of a rate cut next week. See UK Jobs Preview: Gloomy mood opens door to GBP/USD upside? Three scenarios
- Trade: President Donald Trump and his French counterpart Emmanuel Macron have agreed not to slap tariffs on each others' countries through 2020. The meeting alleviates trans-Atlantic tensions.
- The German ZEW Economic Sentiment is forecast to show another improvement in business confidence in the old continent's locomotive.
- The World Economic Forum begins today in Davos, Switzerland with Trump being the top attendee. Ahead of the event, the International Monetary Fund lowered its growth forecasts, with India's economy suffering a substantial downgrade.
- Trump's impeachment trial begins in Washington with Republicans aiming for condensed timetable and a quick acquittal. US traders return from a holiday and trading volume is set to be robust.
Cryptocurrencies have been relatively calm with Bitcoin consolidating around $8,600.