The Coronavirus is spreading across the world, with cases now appearing outside of China in the UK1, the US2 – more than 25 countries in total3 at the time of writing. The World Health Organisation has designated the outbreak as a global health emergency4.

Corona virus outbreak map

Corona Virus Graph

Source: Bloomberg

The question for markets is much more how hard rather than whether the Chinese economy will be hit in Q1 2020, and what impact this will have on other world markets and currencies.  Economists from Bloomberg forecast China’s year-on-year GDP growth to slow to 5.9% but whether this forecast becomes fact depends largely on how successful China is in containing the virus’s spread.

Shanghai Composite Index

Shanghai Composite Graph 
Source: Bloomberg with OFX Treasury market event commentary

When it comes to currencies, the ones most affected by a downturn in China’s fortunes are the Australian and New Zealand dollar. Both are closely linked to China’s economic performance because it is their largest trading partner.

So, if you have to move currency into or out of Australia, New Zealand, China or anywhere else in the near future, we have put together some information to help you understand what is happening.

What does the coronavirus outbreak mean for global markets?

The closest example of a similar outbreak was in 2003 with the SARS outbreak, when a rush to reduce risk by investors prompted significant market falls. 
So far, the reaction to the Coronavirus outbreak is similar, but whether it follows the same pattern as SARS – which had a relatively short-lived impact on markets – really depends on how widespread the outbreak becomes.

For now, the only template we have is how the SARS outbreak impacted stock and currency markets. Initially, the commodities index fell 7.6% in March 2003 as SARS became known globally but this market had largely recovered by late June the same year when the World Health Organisation declared that SARS was under control.

How does the coronavirus outbreak affect currency?

The global economy is now so interlinked that a significant event in one of the major economies filters through to other economies. China is the world’s second largest economy, a status it achieved in 20105.

Nearly $400 billion was wiped off the Chinese stockmarket6 as it opened for the first time since the Chinese New Year started on January 25. The People’s Bank of China has already reduced interest rates and pushed an additional Yuan1.2 trillion into the Chinese banking system in a bid to boost the country’s economy. But the lack of tourism – which accounts for 6% of China’s GDP7 – and the limited movement in and out of China itself from other countries does not bode well for China’s growth this year.

This has resulted in China’s currency, the yuan, weakening against other currencies. On February 3, it was at CHY7.02 to the US dollar, the lowest point it has reached this year.

How much have the Australian and New Zealand dollars declined?

Since the Chinese government announced it had detected a new strain of virus which was a Coronavirus on January 78, the Australian dollar has fallen by almost three cents against the US dollar, from US$0.6929 on January 6 to US$0.6694 on February 2. Over the same period, the New Zealand dollar has fallen around two cents from US$0.6665 on January 6 to US$0.6463 on February 2. Both currencies have fallen against other pairs across the board. For example, over the same period the Euro has risen more than 1.6% against the Australian dollar from 1.6135 on January 6 to 1.6405 on February 5.

What should I do if I need to trade into or out of Australian or New Zealand dollars?

First of all, don’t panic. OFXperts are on hand 24/7 to guide you through your options. We understand that a developing situation like the Coronavirus can be worrying on several levels, but if you are a business needing guidance or an individual who needs to send money abroad, we have the expertise and tools to help you. Get in touch with OFXperts worldwide in one of our regions contact numbers below or by email at

If you want to keep up-to-date with developments, you can sign up to our Daily Commentary and you will have the latest currency updates sitting in your inbox first thing in the morning.

Australia Personal: +61 2 8667 8090, Business: +61 2 8667 8091
United Kingdom Personal: +44 207 614 4194, Business: +44 207 614 4195
Hong Kong Personal: (+852) 3008 5721, Business: (+852) 2777 7147
United States Personal: 1 888 288 7354, Business: 1 888 966 6888
Canada Personal: 1 800 680 0750, Business: 1 855 680 0745
New Zealand Personal: 0800 161 868, Business: 0800 161 898
Ireland Personal/Business: 1 800 948 364
Germany Personal/Business: 0800 181 7242
Spain Personal/Business: 900 838 628
France Personal/Business: 0805 080 584



IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.

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