The Kiwi dollar plummeted overnight as coronavirus fears mount and drive a risk-off sentiment in markets.
Rising Fears on Coronavirus Weigh on Commodity Currencies & Wall Street
The NZD dropped to 3-month lows against the USD overnight and US stocks fell sharply as concerns rise over the increasing number of coronavirus cases globally. Concern is spreading about the potential economic damage from the epidemic. Cases appear to be spreading faster than initially thought and South Korea has reported its first death from the virus.
AUD Tumbles to near 11-year Lows as Australian Jobs Data Disappoint
The Australian dollar dived to near 11-year lows, opening this morning at .6613 against the greenback, a level which hasn’t been seen since March 2009. This dip followed a sharp rise in the unemployment rate, which unexpectedly rose to 5.3%, from 5.1% in the prior month – well above forecasts. The disappointing data supports the case for the Reserve Bank of Australia (RBA) to add further rate cuts, with markets now pricing in a 51% chance of a cut by June.
RBNZ Governor Adrian Orr speaks at midday. Purchasing Managers Indices data are released in Australia today, followed by the Eurozone, UK and US tonight, where we expect these to provide a gauge on the economic impacts of coronavirus. A reading above 50 signifies expansion, while a number below indicates a contraction in orders. Later this evening, Eurozone inflation numbers are released, with markets expecting prices to rise at an annual rate of 1.4%.
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