The euro plummeted on Wednesday. The downfall was caused by the data showing eurozone manufacturing output plunged more than expected in December. That means fourth-quarter eurozone gross domestic product data, which is due on Friday, may also bring bad news.
Meanwhile, the dollar stays high. It traded at $1.0872 per euro. The dollar’s price gained after the U.S. released the data showing the country’s labor market is improving.
The euro traded at 83.92 pence on Thursday in Asia, close to its lowest since Dec. 17. However, the pound was steady at $1.2954.
What Caused Asian Currencies to Collapse?
China reported new data about the coronavirus. The number of deaths in the province increased sharply from 242 to 1,310. As Hubei stated, there are 14,840 new cases as of Feb. 12, up from 1,638 new cases on Tuesday.
The new virus statistics caused the Chinese yuan and the Australian dollar to drop again. In the onshore market, the yuan lowered by 0.1% to 6.9792 per dollar, while offshore the Chinese currency fell by 0.12% to 6.9813.
Australian and New Zealand currencies also suffered. These two countries are more vulnerable to disruption from the virus because they have extensive trade ties with China. The Australian dollar plummeted by 0.19% to $0.6728.
The New Zealand dollar also slipped 0.25% to $0.6451. However, it gained during the previous day due to the central bank’s reference to the chance of future rate cuts in its policy review. The bank is considering such a course in case the economic hit from the virus outbreak worsens.
Meanwhile, the Japanese yen is rising. It surged forward by 0.15% to 109.94 yen on Thursday due to its safe-haven status. Ayako Sera, the market strategist in Tokyo, said, after the coronavirus’ new data’s release, investors couldn’t help but move to risk-off trades. He expects the risk aversion will continue if the authorities can’t reduce the growing panic.