ForexLive Asia FX news wrap: Risk responds to rising coronavirus concerns
Forex news for Asia trading Tuesday 21 January 2020
- 3 reasons for USD/JPY to drop to 105 (coronavirus is not one of them)
- Citi says President Trump is actively trying to cap USD upside against the EUR - here's how
Re the BOJ meeting:
- From the BOJ's quarterly report - risks are skewed toward downside for economy, prices
- BOJ raises its GDP forecasts but lowers its CPI forecasts
- BOJ announce no change to monetary policy settings, as expected
- FX option expiries for Tuesday January 21 at the 10am NY cut
- China's commerce ministry says China welcomes competitive US products into China's markets
- Media reports - Man in Australia being tested for the coronavirus
- More on the CHF - EUR/CHF to gain longer term
- Reports of more than 200 people infected with the new coronavirus (but there is a but)
- ICYMI - The WHO will have an emergency meeting on the coronavirus outbreak
- China - Global Times reports Wuhan has set up a control centre to prevent spread of disease
- PBOC sets USD/ CNY mid-point today at 6.8606 (vs. yesterday at 6.8664)
- US President Trump will speak Tuesday during the European time zone
- What to watch ahead of the Bank of England meeting
- ICYMI: Trump and Macron agreed to a truce on tariffs until the end of the year
- Westpac NZ survey for Q4 - confidence up but employment prospects still a worry
- Bank of England meet next week - here's a preview (no rate cut)
- Australia weekly consumer confidence 108.3 vs 107.3 the week before
- NZD traders - heads up for the GDT dairy auction coming up Tuesday during London time
- Trade ideas thread - Tuesday 21 January 2020
- New Zealand services PMI for December 51.9 (prior 53.3)
- Iraq - Reports that two rockets have hit Baghdad’s Green Zone
- ANZ have amended their RBNZ call for 2020, expect on hold for the whole year
There was little fresh news on the coronavirus today, but news reported Monday was repeated and suddenly taken note of:
- Coronavirus has spread to Beijing, Shanghai (we reported this on Monday)
- Coronavirus has spread to 3 countries (we reported this on Monday here)
- More than 200 people inflected(we reported this on Monday - same link) with 4 deaths
We also warned to keep on eye on it .... and it took 24 hours but sellers finally hit 'risk', driving equities, yuan & AUD down and yen, CHF, gold higher.
In China, travel-related stocks were hit (ahead of the upcoming lunar new year migration - virus fears are likely to have at least some impact on travel, eating out and related activities) while healthcare-related stocks rose.
USD/JPY dropped from circa 110.20 to lows around 109.90 before stabilising somewhat. AUD/USD lost 35 or so points also while USD/CNH gained 300+ from its session lows.
While on the coronavirus, news broke after all this that a suspected case was reported in Australia.
In other news it was BOJ policy statement day - no change in settings was anno9unced, as expected. The outlook report raised the forecast for GDP ahead (the government stimulus package announced in December was expected to have this impact) but offsetting this positivity was the lowering of projections for CPI ahead, thus keeping the BOJ well and truly in massive easing mode. Yen impact from the BOJ announcement was minimal.