Forex Today: Coronavirus fears spread and weigh on markets, Aussie surges, all eyes on the ECB

Yohay Elam FXStreet

Here is what you need to know on Thursday, January 23:

Chinese authorities have shut down access links to Wuhan, the large provincial capital where the coronavirus originates from. The news, coming ahead of the Chinese Lunar New Year, is weighing on markets. USD/JPY is on the back foot, trading well below 110.

The Australian dollar is rising after the land down under reported an increase of 28,900 jobs and its Unemployment Rate fell to 5.1%. The chances that the Reserve Bank of Australia cuts rates have diminished.

The European Central Bank is set to leave its interest rate unchanged. President Christine Lagarde may reveal details of the ECB's strategic review. The bank may consider allowing inflation to run at higher levels in order to compensate for past low prices.

See ECB Preview: Glass half green or a Lagarde drag on EUR/USD? Three scenarios

The Bank of Canada sent the loonie plunging after it expressed concern about the economy and revealed that it had considered cutting rates already now. Governor Stephen Poloz sounded somewhat more optimistic, but USD/CAD continues trading above 1.31.

Brexit: Prime Minister Boris Johnson "got Brexit done" after the House of Lords gave its final seal to the UK's exit at the end of the month. Johnson remained optimistic about clinching a deal on future relations with the EU by year-end.

The pound jumped on Wednesday after the UK CBI Industrial Trends figure beat expectations with -22. The indicator rarely impacts the pound. The final word related to the Bank of England's rate cut comes on Friday with Markit's Purchasing Managers' Indexes.

The loonie was also hit with falling oil prices. WTI is trading below $55 ahead of the release of Crude Oil Inventories later on Thursday.

Cryptocurrencies are gradually retreating with Bitcoin trading below $8,500.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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