Monday February 18th, 2020

Coronavirus (COVID-19) developments continue to dominate investors focus as concerns rise over the longterm impact of the virus on businesses globally. The number of virus cases has reached +73k with almost 1,900 deaths reported. The impact from the virus is being felt by global companies such as Apple & HSBC. Chinese CNY has weakened back above 7.00 vs US$, AUD, NZD and Asian currencies are weaker. Euro is close to 3 year lows, NOK tumbles to 19 year lows vs US$ and Yen, CHF remain static vs US$. Coronavirus developments and further potential corporate profit warnings will dictate intraday direction.

Oil prices fell pressured by the lower demand due to the Coronavirus and the lack of action by OPEC+ counties. C$ has remained relatively stable in comparison to other commodity currencies. Weakening oil prices may put additional pressure on the currency and we could see a retest of 1.3310 level. No key US or Canadian data out today, expect any further weakness in oil prices to impact C$.

Euro continues under sustained selling pressure testing almost 3 year lows amid poor German economic data.  The combination of stronger US economic data and US safe-haven status during the Coronavirus fears is seeing investors exiting Euro. With the ongoing economic divergence between the US and EU, the Euro could weaken further towards 1.0680 vs US$. No key US data out today, the markets will focus on the coronavirus developments for direction.

GBP remains relatively resilient vs US$, shrugging off weak UK wage figures and ongoing Brexit concerns. The UK Chief negotiator rejected the EU’s demand to play by its rules and that Britain would make its own rules. The defiant words come ahead of official negotiations due to begin in two weeks. EU/UK trade and Coronavirus developments will dictate GBP direction today.