Rate of coronavirus deaths continue to rise
Thursday 13 February, 2020
Daily Currency UpdateGBP - British PoundIts been a topsy-turvy week for sterling as it fell on Brexit concerns then rallied as they eased somewhat and was given an extra boost as data on Tuesday showed the economy grew at a quicker pace than predicted between Nov and Dec. GBP/USD is currently trading around 1.2970 after making a play for 1.30 yesterday afternoon however there is stiff resistance around this level and some positive developments re: UK/EU trade or some bad news from the US economy will likely be needed to push it back up through the big number. Its a relatively quiet end to the week from the UK with PM Boris Johnson's cabinet reshuffle scheduled later today the main event for the rest of the week. We shouldn't expect the changes to move sterling too much however it will be interesting to see the new government's line up ahead of trade talks kicking off with the EU next month. GBP/EUR is trading above 1.19 as market jitters over the state of the eurozone economy and the potential impact on it from the coronavirus affect sentiment around the shared currency.
Key MoversThe coronavirus, or Covid-19 to give it its unique name as given by the World Health Organisation, continues to dominate news with the daily death rate hitting a new high over the past 24 hours. Chinese officials have changed the methodology of how they qualify cases meaning there has been a huge jump in infections with the number now standing around 60k. 242 deaths were recorded on Wednesday pushing the death toll above 1350. Even using the old way of confirming infections/deaths yesterday was the deadliest day yet and as a result equity markets and risk assets around the world have been shunned during the Asian session. It appears there is some paring of losses taking place as Europe comes online, however the key risk baramoter, USD/JPY, is back under 110 trading at 109.80 at present. It appears the situation may get worse before it gets any better so expect the yen, swissy and greeenback to continue to be well bid as the crisis rumbles on.With deposit rates already in negative territory, and the European Central Bank currently implementing another round quantitative easing, the central bank has little wriggle room to stimulate its stalling economy with ECB head Christine Lagarde again this week stating that fiscul stimulus is needed from member countries to help promote growth. EUR/USD hit its lowest level since the spring of 2017 yesterday touching 1.0860 before recovering a touch to currently trade at 1.0890.Today's main event is US CPI numbers with a monthly uptick of 0.2% expected for both the core and overall reading. Tomorrow sees the first estimate of Q$ GDP from the Eurozone ahead of US Retail Sales numbers.
- GBP/USD: 1.29 - 1.3060 ▲
- GBP/EUR: 1.1830 - 1.1955 ▲
- GBP/AUD: 1.9190 - 1.9350 ▲
- GBP/NZD: 1.9990 - 2.0180 ▲
- GBP/CAD: 1.7120 - 1.7280 ▼