Tuesday January 28th, 2020

The World Health Organization called the coronavirus outbreak « an emergency in China » as the death toll in China rises to 106. Japan’s economy minister in a news conference said « there are concerns over the impact to the global economy from the spread of infection in China ». US$, JPY, CHF continue to firm as investors take shelter in perceived currency safe-havens. Intraday a number of key US data releases will be watched closed for US$ direction.

Oil prices continued to weaken for a 6 straight day with fears the China virus could cause a global economic slowdown. C$ is trading close to a 2 month low vs US$ on coronavirus concerns which caused oil prices to fall. The BOC’s dovish comments is also fueling investor worries as the likely hood of rate easing increases in the current economic conditions. A break of 1.3215 could see further C$ weakness towards 1.3350 (Oct19 lows)

Euro remains under pressure hitting a 33 month low vs safe-haven CHF. Concerns over the China virus as well as the Brexit on Friday is keeping Euro at its 2020 lows vs US$. A break of 1.0980 could see further Euro weakness towards 1.0875 (Oct19 lows). Intraday focus remains on US data releases and coronavirus updates.

General safe-haven currency strength and investor concerns ahead of BOE Thursday and Brexit Friday caused GBP to sell off. GBP has stalled around the psychological 1.30 level vs US$. EU Chief negotiator warned that there is still the risk of a hard Brexit at the end of 2020. A lot to focus on for GBP from both domestic and global risk concerns, so expect GBP to remain volatile.