Forex Today: Calm amid China’s coronavirus storm; US data in spotlight

Dhwani Mehta FXStreet

Here is what you need to know on Tuesday, January 28:

China’s fast-spreading coronavirus epidemic and the rising death toll ensued a slump in the Asian equity markets, as investors remained wary about the contagion risks and its implications on the global economic growth.

China’s National Health Commission (NHC) reported confirmed coronavirus cases at 4,515 and death toll at 106 while the first case of the virus was confirmed in Germany.

However, a sense of calm prevailed across G10 fx space, with most majors in tight trading ranges, as the US dollar held steady near two-month highs against its main competitors. The US Treasury yields traded modestly flat while the US stock futures rebounded over 0.50%.

USD/JPY held onto minor recovery gains around 109.00 while the Antipodeans renewed multi-week lows. AUD/USD breached 0.6850 after the Australian NAB Business Survey disappointed.

The Kiwi hit a new seven-week low at 0.6536, tracking the weakness in the Chinese yuan. Meanwhile, the Canadian dollar was undermined by weaker oil prices, as USD/CAD tested the 1.32 handle.

EUR/USD traded close to 2020 lows on 1.1000 despite the upbeat German IFO survey. GBP/USD stalled its overnight bounce and traded flat in mid-1.30s, with all eyes on the Bank of England (BOE) base rate decision and post-Brexit trade talks with the EU.

Amid fragile market mood, gold prices consolidated the recent gains around $1480 while oil prices traded on the back foot, extending a week-long losings streak.

Cryptocurrencies traded with moderate gains, with Bitcoin trading above $9,000 mark.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD remains depressed below mid-1.1800s; downside potential seems limited

The EUR/USD pair attracts some sellers for the second consecutive day on Tuesday and hovers below mid-1.1800s amid a relatively quiet trading action during the Asian session. The broader fundamental backdrop, however, warrants some caution for bearish traders before positioning for deeper losses.

When is the UK employment data and how could it affect GBP/USD?

The United Kingdom labor market data for the three months ending December is scheduled to be published today at 07:00 GMT. GBP/USD trades 0.16% lower to near 1.3610 at the press time. The 20-period Exponential Moving Average slips to 1.3631 and caps rebounds as price holds below the gauge.

Gold downside appears capped ahead of US-Iran talks

Gold is off the lows but remains under moderate selling pressure below the $5,000 threshold early Tuesday. Gold now looks to the US-Iran nuclear deal talks for a fresh trading impetus as US traders return after the long weekend.

Jupiter rises on native SOL staking, TVL rebound

Jupiter edges higher by 3% at press time on Tuesday, approaching the $0.1700 level. The lending protocol announced native staking as collateral, allowing users to borrow against natively staked SOL on certain vaults.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.