In This Article:
Earlier in the Day:
It was a quiet day on the Asian economic calendar this morning, with economic data limited to UK RICS house price figures.
While there were no material stats, monetary policy was in focus, with RBA Governor Lowe speaking this morning.
Bank of Canada Governor Poloz and RBNZ Governor Orr were also scheduled to speak early in the day.
While monetary policy chatter drew interest, updates from China provided direction early in the session.
News of a sharp jump in coronavirus COVID-19 deaths on Wednesday and spike in new cases reversed the market’s laissez-faire sentiment from Wednesday.
A reported 242 people died of the virus in Hubei Province on Wednesday. This was the largest daily loss since the outbreak began. There were also 14,840 people diagnosed with the virus. On Tuesday, the total number of new cases had risen by just 2,015 that had fueled demand for riskier assets.
For the Aussie Dollar
In the early part of the day, RBA Governor Lowe was speaking in Canada alongside Bank of Canada Governor Poloz.
The RBA Governor stated that there was not an obsession amongst board members to return inflation to its 2% to 3% target range in a hurry.
His comments had limited influence, however, as updates on COVID-19 cases weighed on risk appetite.
At the time of writing, the Aussie Dollar was down by 0.15% to $0.6727.
Elsewhere
At the time of writing, the Japanese Yen was up by 0.13% to ¥109.95 against the U.S Dollar, with risk aversion supporting the Yen early on. By contrast, the Kiwi Dollar was down by 0.29% to $0.6448.
The Day Ahead:
For the EUR
It’s a relatively quiet day ahead on the economic calendar. Economic data is limited to finalized January inflation figures out of Germany.
Barring a material upward revision, the numbers are unlikely to have a material influence on the EUR.
Negative sentiment towards the Eurozone economy will continue to pin back the EUR ahead of tomorrow’s 4th quarter GDP numbers.
As things stand, monetary policy diversion remains in favor of the Dollar. The EUR would have seen a much larger decline had the FED taken a more hawkish outlook on policy for the year ahead.
With Lagarde’s hands tied, for now, parity remains off the table though that could change if we begin to see a more marked spread of the coronavirus beyond Asia… That really would bring down the ECB’s hope of support from consumer spending.
At the time of writing, the EUR was flat at $1.0874.
For the Pound
It’s another particularly quiet day ahead on the economic calendar, with no material stats due out of the UK to provide direction.