Daily Currency Update

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The U.S. dollar rises again as a haven following fears of the Coronavirus becoming a pandemic.

USD - United States Dollar

The U.S. dollar rises 0.29, 0.45 0.48, and 0.46 percent versus the Euro, Pound, Aussie dollar, and Loonie, respectively. The only currency that it is increasing versus the Greenback this morning is the Japanese Yen due to it being a natural safe-haven currency. The main reason is the demand for safe havens as global equity plunges in overnight trading following reports that the coronavirus is spreading quickly outside China.

The U.S. dollar continues to look vulnerable as it nears a four-month high. The Euro, as the main counterparty of the U.S. dollar, started to rise last Friday. Political risk may cause the U.S. dollar to fall. For instance, Bernie Sanders might continue building momentum and secure the nomination on Super Tuesday if Democrats don't quickly align behind an alternative. Bernie Sanders won Nevada last weekend, and FX markets have not priced in the "Bern factor" in the Greenback yet.

Key Movers

Concerns about the impact of the coronavirus on China activity have prompted a sharp decline in global equity and oil prices. Central bankers and finance heads from the world's largest economies say they see downside risks to global growth as the coronavirus raises uncertainty.

This week in North America, Fed Vice Chairman Richard Clarida will discuss the outlook for interest rates and the economy, and Bank of Canada's Lane will give a speech in Montreal. In Europe, Bank of England officials, Andy Haldane and Jon Cunliffe, will speak in London during an otherwise quiet week for the U.K. regarding economic releases. One of the most critical speeches will likely be the ECB's speech by President Christine Lagarde by the middle of the week. Last week, European Central Bank Chief Economist, Philip Lane, said that he expects the Euro-area economy to bounce back.

Early today, Germany released the IFO Business Climate economic sentiment data, which came in at 96.1 versus the 95 expected. Morale rose in Germany, but the Euro was unfazed by coronavirus news.

Expected Ranges

USD/CAD: 1.3261 - 1.3320 ▲

EUR/USD: 1.0821 - 1.0869 ▲

GBP/USD: 1.2895 - 1.2933 ▼

AUD/USD: 0.6585 - 0.6624 ▼

NZD/USD: 0.6300 - 0.6350 ▼