Thursday January 30th, 2020

The coronavirus remains the primary concern for investors with nearly 8,000 people infected and 170 people dead from the virus. The WHO is to decide if the spread moves from a « China » emergency to a « Global » emergency as the virus has spread to 15+ countries. Investor fears are growing about what the global economic hit will be from the coronavirus. Safe haven currencies have extended their gains, whilst Chinese CNY fell to a fresh 1 month low. Tourism related currencies such as the THB hit 7 month lows vs US$ and Aud & NZD are near 3 month lows. A flurry of US economic data out this morning could provide intraday direction to US.

Oil prices fell 1% on growing fears about the impact the coronavirus will have on China’s economy. C$ fell to a 2 month low vs US$ as oil prices fell and global growth concerns increase. The US signed off on the USMCA on Wednesday leaving only Canada to ratify the trilateral agreement. The signing of the agreement is positive, but under the current conditions is unlikely to help C$ strengthen. C$ is pivoting at the key 1.3225 level and has the potential for further weakness towards 1.3350 next.

Euro has continued to hold above the key 1.0980 support level ahead of the key EUR CPI data out later this morning. Under the current conditions of potentially slower global economic growth due to the coronavirus, Euro has the potential of further weakness towards 1.0850. Markets will watch for US data this morning and Coronavirus updates for direction.

GBP bounces off the lows as the BOE keeps rates on hold, highlighting signs of « post-election pickup ». GBP has been somewhat shielded from the China virus impact as investors remained focus on tomorrows exit from the EU.