The stock markets suffered severely during the last days. Chinese authorities released new data about coronavirus. Furthermore, South Korea, Iran, and Italy have also reported new cases. The numbers are concerning, and so far, the World Health Organization can’t pinpoint how the virus is spreading so quickly in the countries, which have no apparent links.
The Italian authorities halted the carnival in Venice and quarantined affected towns, but so far, they were unable to find out where the virus spread from. South Korea is also trying to squash the outbreak, but its stocks suffered severely during the last days.
While Asian currencies collapsed, the U.S. dollar is in high demand. Experts think that the U.S. economy will come out less damaged from the epidemy than other countries.
The dollar is very popular as a safe-haven currency for now. The currency hit an almost three-year peak last week, but it fell slightly on Friday. It traded at $1.0820 against the euro and at $1.2942 against the pound.
The Swiss franc has also surged forward due to the risk-off tactic. It rose by 0.3% despite the dollar’s strong competition. Barclays’ analysts stated that the market reaction to the coronavirus appears to be evolving and beginning to differentiate the currencies vulnerable to the virus from the rest.
What about Asian currencies?
The Chinese yuan fell along with kiwi, but afterward, they both managed to strengthen slightly. Four Chinese provinces lowered emergency restrictions, causing the currencies’ boost. However, the Australian dollar collapsed to an 11-year low.
The investors abandoned yen as the safe-haven due to its possible exposure to coronavirus. The currency traded flat at 111.55 per dollar. On the other hand, Malaysia’s ringgit dropped by 0.7% because of the political turmoil in the country.
Indonesia’s Rupiah lowered by 1%. It was steady until now due to its relative independence from the Chinese trade. Still, it seems, the global crisis is influencing Indonesia’s economy too. The Korean won has also collapsed to a six-month low. The analysts don’t expect the currencies to rally until the epidemy fears subside.