The Kiwi Dollar has drifted lower overnight as market risk sentiment became more cautious. A spike in reported coronavirus cases in China has scaled back some of the positive momentum seen earlier the week. The economic impact of the virus continues with many cancelled events and conferences, along with many companies issuing profit warnings.
US Annual CPI Higher
The US dollar has turned slightly positive this morning after inflation and job numbers met expectations on almost all fronts. US Core CPI inflation was flat in January at 0.2%, but the annual number was slightly stronger 2.5%. Despite the positive data, the dollar is being held back by stronger demand for yen and pounds. More data to be released tonight with US Retail Sales for January, followed by the University of Michigan Sentiment Index later in the day.
Euro Fall Continues
The euro is continuing its dismal run in February and has now fallen to its lowest level since 2017. The selloff is being driven by speculation that the economic impact of the coronavirus will keep the European Central Bank dovish.
Pound Gains on Political Moves
The best performing major currency has been the British Pound after reports of UK Chancellor Javid’s resignation. Markets are expecting his proposed replacement, Rishi Sunak, to be more aligned with Prime Minister Johnson’s economic expansion plans and see an increase in fiscal spending.
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