Developed Countries Face Falling Economic Data Amid Global Pandemic

The new coronavirus outbreak in China has been effectively contained through the governments strict control measures in the past month, yet the situation appears grim around the world. Over 30 countries have reported cases so far, weighing on their economies respectively.

Data released by Japan‘s Cabinet Office on February 17th suggests that Japan’s GDP shrank an annualized 6.3% during Q4, 2019. This is the lowest level since Q3, 2014 and the first time in the past 5 quarters that Japans economy sees a decline.

Haruo Watanabe, Director General of National Institute of Infectious Diseases, noted earlier that Japan‘s outbreak is now in the early stage and will keep evolving. Some analysts say that the close economic ties between China and Japan mean China’s economy under the epidemic will inevitably affect Japan‘s economy negatively, while further spreading of the coronavirus in Japan will add to pressure on the country’s economy on top of other problems such as sluggish domestic demands. Development Bank of Singapore(DBS) warned in its latest research that Japan is on the brink of a recession from technical perspective (i.e. negative economic growth for over 2 consecutive quarters).

As for Australia, though there are not many cases confirmed yet, both the raging bush fire that had burned for months and traveling ban issued after the coronavirus outbreak hit Australia‘s economy significantly. The country’s retail, catering, education and tourism sectors all suffered a heavy blow after the Morrison Government announced restrictions on tourism, and Australian dollar has plunged nearly 6%, with its rate against US dollar falling to a decades low.

The traveling ban and persistent fire had put AUD on edge. “Technically speaking, the Australian dollar is very fragile, and as USD remains strong many consider the price of AUD during the financial crisis to be a critical support level for the currency.” Observed Rodrigo Catril, Senior Forex Strategist of National Australia Bank.

Driven by hedge funds and the relaxed monetary environment, gold rushed to a 7-years high of US$1,686.22/ounce on February 25th. For other precious metals, market expects porpezite to rise further due to its low production.

The forex market continues to fluctuate under the influence of the coronavirus outbreak as well as other factors. To view more of the latest forex updates and analysis, please visit WikiFX website or download the App. Also, WikiFX reminds investors to take care of your health and take necessary protective measures against the new coronavirus.