China Ramps up Virus Containment Initiatives | Euro Falls Ahead of Fed
Published January 29, 2020
Coronavirus cases in China have now surpassed the country’s total from the 2003 SARS epidemic, leading to further action by the Chinese government to contain the outbreak. Government-imposed travel restrictions have ramped up, businesses are shutting down, and multiple airlines are suspending flights into China. The city of Wuhan, which is at the center of the outbreak, has been completely locked-down and is taking a major economic hit. As one of China’s key auto, steel, and logistics hubs, the crisis is likely to weigh on the country’s GDP and global trade the longer this plays out.
The euro continues to fall as the risk-off sentiment dominates global markets. Heading toward this afternoon’s Fed announcement, the Euro is sitting below 1.09 against the US dollar, its lowest level in two months. Even with euro area GDP and CPI coming up on Friday, it appears the short-term path for the euro is likely to be weighed by overall market sentiment.
Oil prices have spiked after reports of a missile attack on Saudi Arabia. After being in free-fall for most of January, oil prices have rebounded nearly 1.5% on the news. Despite the news, commodity-linked currencies are still under pressure from the overall market fears, with the loonie, aussie, and kiwi dollars all in red this morning.