Home Daily Commentaries The U.S. dollar falls as the coronavirus in China seems as though it will be contained.

The U.S. dollar falls as the coronavirus in China seems as though it will be contained.

Daily Currency Update

USD - United States DollarThe U.S. dollar fell after China’s National Health Commission announced plans to contain the coronavirus. Still, market participants continue to keep an eye on the economic impact of the coronavirus in China. The Greenback is down against all of its G-10 peers, except for the Japanese Yen and Swiss franc. The EUR/USD erased losses in the European session, and it is increasing 0.1 percent at this time of this writing. The U.S. dollar also took a hit following President Trump saying in an interview from Davos that, “The dollar’s very, very strong,... it’s very bad in terms of manufacturing”.

Key Movers

The British Pound is a top performer, increasing 0.61 percent versus the U.S dollar. Bets of a potential BoE interest-rate cut this month fall after a report showed an increase in optimism among U.K. manufacturers / strong U.K. business sentiment.Inflation numbers in Canada were released a few minutes ago, and they are pulling the Loonie back from session highs due to a miss on headline inflation. Inflation came in at 2.2 percent, versus the 2.3 percent expected.The USD/CAD was trading at 1.3041, falling 0.21 percent (stronger Loonie) ahead of the BoC monetary policy announcement. According to Bloomberg Economics, the Monetary Policy Report will show economic growth headwinds coming from December; therefore, impacts will be felt by the Loonie if the BoC changes its view on its flexibility regarding how to tackle the recent economic slowdown. If the BoC’s view changes from temporary to persistent, the Loonie will be driven lower. If the BoC keeps saying that this is a temporary situation (regarding the recent economic slowdown), the Loonie will be driven higher.

Expected Ranges

  • USD/CAD: 1.3020 - 1.3120 ▼
  • EUR/USD: 1.1075 - 1.1110 ▲
  • GBP/USD: 1.3075 - 1.3151 ▲
  • AUD/USD: 0.6825 - 0.6855 ▼
  • NZD/USD: 0.6582 - 0.6619 ▼