Yen firm over China virus concern; Aussie jumps on jobs data

By Administrator_ India

Capital Sands

 

The safe-haven Japanese yen was firm and the Chinese yuan fragile on Thursday as traders kept a wary eye on the spread of a virus in China, while the ailing Australian dollar jumped after a surprise drop in unemployment.

Deaths from the flu-like coronavirus, rose to 17 on Wednesday. A total of 571 cases have now been confirmed and Chinese state media reported overnight that transport to and from the city of Wuhan in central China, where the outbreak originated, is to be shut.

The World Health Organisation will decide later on Thursday whether to declare the situation a global health emergency.

USD/CNH remains a solid guide, and I see risks if we see the cross push into 6.9150 with a belief that the Chinese authorities will stimulate should economics be threatened.

The yuan held around 6.9110 per dollar in morning offshore trade , not far above a two-week low hit on Wednesday.

The Japanese yen, seen as a haven by virtue of Japan’s position as the world’s largest creditor, rose 0.1% to a two week high of 109.65 per dollar as investors sought safety.

The U.S. dollar was otherwise steady, holding at about $1.1093 per euro and at 97.527 against a basket of currencies.

A major concern is that the virus could spread quickly as millions of people travel across China, and the world, to celebrate the Lunar New Year at their hometowns.

The British pound sat a fraction below a three-week high at $1.3147, after an overnight rebound in manufacturing sentiment prompted investors to trim rate cut bets.

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