Concerns that the Coronavirus is spreading hard and fast beyond the borders of China have pushed FX traders to the safe haven US Dollar, with the Australian Dollar and the Euro losing favor. Over the weekend, Italy, Iran and South Korea all reported new Coronavirus cases, with more than 150 reported in Italy, 43 in Iran and 760 in South Korea. The traditional safe haven currencies, the Swiss Franc and Japanese Yen, have not benefited from the move to safety; analysts say that the greenback has become the favorite as the US economy is viewed as the best sheltered in the event the virus impacts the global economy. A strengthening economy and higher comparative yields have also helped to keep the greenback supported.
As of 11:01 am in London, the USD/JPY was trading at 111.2850 Yen, down 0.025% and sliding away from the session peak of 111.692 Yen. The EUR/USD was trading lower at $1.0817, a loss of 0.2894%; the pair has ranged from $1.08047 to $1.084890. The AUD/USD was trading at $0.6593, down 0.5131%.
In the Eurozone, Germany’s IFO surveys were released earlier today and were surprisingly better than anticipated. The Business Climate reading came in at 96.1, against an expected 95.3, while the Current Assessment came in with a reading of 98.9, with analyst forecasting a reading of 98.6. Finally, the Expectations survey was higher at 93.4, with 92.2 predicted. Tomorrow, Germany’s GDP reports for the 4th quarter of 2019 will be released and analysts are predicting that growth will have stagnated over the period from the previous reading.