FX Market Trend in Correction Amid Raging COVID-19

On January 30th, 2020, local time World Health Organization Director General Dr Tedros Adhanom Ghebreyesus held press conference in Geneva and announced the Novel Coronavirus(COVID-19) outbreak to be an public health emergency of international concern(PHEIC). The economic cost of this raging epidemic is growing in China as well as other parts of the world.

Global distribution of COVID-19 cases on February 11th

2020 has started with the “black swan” of COVID-19 outbreak, and the fast spreading virus further stirred up concerns of global investors, bringing people's concern about how the epidemic will affect global forex market.

Frank Cholly, Senior Market Strategist from RJO Futures, mentioned that were seeing market sentiment of risk-aversion. Worrying about the impact of this outbreak on global economy, pessimistic investors are selling RMB assets and turning to safe-havens such as gold, Japanese yen and Swiss Franc.

Meanwhile, an IMF senior official observed during an interview with CGTV that “it may be too early to decide the real impact of the epidemic on major global economies”. IMF believes that China has the resources and resolution needed to tackle the COVID-19 outbreak.

Also, according to Goldman Sachs, their estimation on the impact of COVID-19 outbreak suggests the rate of newly infected cases will peak in the first quarter, pulling the global economic growth down by 0.1%-0.2%.

Jeffrey Siu, the Chief Operating Officer of Forex company ATFX, also noted that the company‘s business hasn’t seen substantial changes so far since the coronavirus outbreak.He outlined on behalf of the company during an interview with Finance Magnates that “We have not seen any material changes in the number of new clients signing up for our services across the world.”

How will the trend of RMB change amid the raging epidemic, and how should investors adjust their strategies accordingly？ Stay tuned as WikiFX analysts bring you more comprehensive insights.

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