Forex Today: Risk-off continues on coronavirus pandemic fears, US non-farm payrolls eyed

Forex today in Asia fails to repeat the pre-NFP trading lull as coronavirus (COVID-19) carnage continues to weigh on risks. Wall Street jumped back into the sea of red and so does the Asian stocks by the press time.

Increasing global worries, commensurate with the numbers, about the pandemic, keep pushing traders off the commodities and the linked currencies like the dollars of Australia and New Zealand. However, this doesn’t mean that the US dollar recovered from its two-month low.

Among the G10 currency pair, NZD/USD benefited from the USD weakness as RBNZ becomes the only dollar-dominated central bank left to announce a rate cut. On the other hand, USD/CHF portrays the current risk aversion while declining to the fresh 24-month low.

EUR/USD remains mildly positive whereas USD/JPY flashes fresh six-month low under 106.00. Even so, USD/CAD continues to remain positive as WTI stays weak despite OPEC headlines/speculations, on expectations of downbeat demand. Further, gold prices rise towards the previous month’s multi-year top amid risk aversion while GBP/USD seems to be the choppiest following the end of Brexit deal talks and BOE’s signal of no immediate rate cut.

Main topics in Asia

IEA plans to revise down oil demand forecasts due to coronavirus – Bloomberg

Singapore officials: Coronavirus starting look like a global pandemic

US Treasury yields hit fresh record low

BOJ to ease monetary policy in March to counter coronavirus fears - Reuters Poll

Total number of coronavirus cases in mainland China rise to 80,552

Fed's Williams: Central banks to play important role in addressing economic impact of coronavirus

South Korea confirms 518 new coronavirus cases

Fed's Kashkari: Rates may be hiked if coronavirus impact is not that bad

US 10-year treasury yields refresh historic low under 0.90%, Japan’s NIKKEI drops 2%

Japan's Aso: Will respond to coronavirus impact depending on urgency

Australia’s Retail Sales drop 0.3% in Jan, surprise negatively – AUD/USD off the highs

China’s GDP likely to drop to 3.5% in Q1 2020 vs. 6.0% in Q4 2019 – Reuters poll

Fed’s Kaplan: Too soon to judge what the Fed will do at the March meeting

Washington State: Total coronavirus death toll in the US reached 12

US VP Pence: US does not currently have enough testing kits

Key focus ahead

When it’s the first week of the month, employment numbers from the US and Canada are undoubtedly the key catalysts to watch. While the US Nonfarm Payrolls remain in the spotlight, today’s February month jobs report will be the key to determine whether the Fed and the BOC have more room after the recent 0.50% rate cuts.

On the qualitative front, the Fedspeak could try to offer intermediate moves to the markets while coronavirus relating headlines will continue to be the major catalyst.

Furthermore, OPEC meeting is still on with speculations mounting that the cartel will propose 1.5 bbl/day to its alliance with Russia and other allies, broadly known as OPEC+.

EUR/USD hits 7-month high on coronavirus pandemic fears

Euro has become a haven currency due to ECB's negative rates and Eurozone's current account surplus. The buying interest around the single currency remains strong on Friday with investors selling risk in favor of safe havens on reports stating the coronavirus is looking like a global pandemic. 

GBP/USD: Ascent stalls at key hurdle despite record lows in US yields

GBP/USD is struggling to clear resistance of the trendline falling from December and January highs on Friday despite the slide in the US treasury yields. Dovish BOE expectations could keep gains in GBP under the check. 

US Non-Farm Payrolls February Preview: The first facts

Non-farm payrolls are expected to rise by 175,000 in February following January’s 225,000 increase. The unemployment rate is expected to be unchanged at 3.6%. Hourly earnings will rise 0.3% after January’s 0.2% gain. Annual earnings should increase 3% following 3.1% in January.  Average weekly hours will be stable at 34.3. 

Canadian Jobs Preview: Lonely loonie needs robust figures to stay afloat, three scenarios

Back in January, Canada reported an increase of 34,500 jobs, beating expectations. While employment figures are choppy in the North American nation, they have generally been upbeat since early 2019 onwards. An increase of 10,000 positions is on the cards for February and the jobless rate is forecast to edge up to 5.6%. While the bar is low for an upside surprise – it may not be enough for the loonie.