Forex Today: Coronavirus crash boosts EUR, JPY as USD only beats minors, more carnage awaited

Here is what you need to know on Friday, February 28:

The stock market sell-off has worsened as major US indices fell over 4% on Thursday and over 10% from the highs. Other markets are followed as a bear market and global recession risks are rising. 

The disease has spread to sub-Saharan Africa with the first case in Nigeria, the US has ramped up testing, Japan is closing schools, South Korean cases top 2,000, and the US is ramping up testing. President Donald Trump has praised America's dealing with the virus. The number of worldwide cases has topped 83,000. More and more companies have published warnings and forecasters are updating their projections for 2020. The World Health Organization has said that the outbreak is at a "decisive stage." The WHO may soon declare Covid-19 as a pandemic.

The safe-haven yen has been gaining ground with USD/JPY falling below 109. US ten-year yields have reached new record lows below 1.24%. Gold has been unable to capitalize on the recent market slump and trades below $1,630. 

EUR/USD is trading around 1.10, as falling US yields weigh on the dollar and efforts by Olaf Scholz, Germany's finance minister, to introduce fiscal stimulus have buoyed the euro. Christine Lagarde, President of the European Central Bank, does not see the need for imminent monetary stimulus in the wake of the crisis.

GBP/USD has been struggling around 1.29 as Prime Minister Boris Johnson has laid down a tough stance ahead of post-Brexit talks that kick off on Monday. The UK threatens to walk away by June if not enough progress is made. Mark Carney, the outgoing Governor of the Bank of England, has said that economic growth will be downgraded in the UK.

Oil: The Financial Times has reported that Saudi Arabia aims to cut oil production by one million barrels per day to face dwindling demand. Prices have been hit hard with WTI at around $46.

Commodity currencies have crashed, with AUD/USD nearing 0.65 and NZD/USD dropping below 0.6250 amid the first case of coronavirus in New Zealand. 

Fed: Charles Evans, President of the Chicago branch of the Federal Reserve, has echoed his colleagues by saying the bank is watching the situation closely but he also does not see the need to act. The odds for a rate cut in March are growing according to bond markets. 

The economic calendar features preliminary inflation figures from Germany for February, Canadian Gross Domestic Product data for December, and several US figures. The Fed's preferred inflation gauge, the Core Personal Consumption Expenditure (Core PCE) is set to remain below the 2% goal. 

Investors are waiting for next week's first significant economic figures related to coronavirus. 

See March Madness: 5 critical (mostly) coronavirus-linked events to rock markets in first week of March