Forex Today: China coronavirus damage shrugged off by markets, RBA boosts AUD, pound licks wounds
Here is what you need to know on Tuesday,
Coronavirus: The number of infections has topped 20,000 and a second death has been confirmed out of mainland China. President Xi Jinping has warned that social stability could be at risk while Beijing is mulling lowering growth forecasts. Moreover, China is considering reopening the trade deal with the US due to the virus. Hyundai will stop production in Korea while LG will halt activity in China amid cases of the disease.
Markets in Asia have calmed after an initial drop amid measures taking by Chinese authorities. USD/JPY is edging higher while gold is slipping toward $1,570. Commodity currencies as WTI oil managed to recapture the $50 level after selling off earlier.
AUD/USD has risen above 0.67 after the Reserve Bank of Australia left its interest rate unchanged at 0.75% and sees the glass half full. The land down under enjoys robust employment but Phillip Lower, Governor of the RBA, included the coronavirus is one of the risks.
Brexit: UK Prime Minister Boris Johnson and Chief EU Negotiator Michel Barnier laid out opposing visions for post-Brexit relations. One of the thorniest issues is regulatory alignment. Brussels wants to condition market access to the UK following EU rules, while London opposes it. The pound fell sharply amid fears that the UK could end the transition period without a trade deal.
US Factory Orders for December are on the agenda today after the ISM Manufacturing Purchasing Managers' Index surprised on Monday with 50.9 points, showing that the industry has returned to growth. The US dollar received a boost on the news.
Democratic Primaries: The first vote in the opposition party's race toward the Presidential Elections has deteriorated to chaos amid inconsistencies. Markets prefer moderates such as Joe Biden over ideologues such as Bernie Sanders.
Cryptocurrencies are edging lower, with Bitcoin slipping below $9,300. Nevertheless, digital coins are holding onto most recent gains.