Forex Today: Safe-haven flows return amid China coronavirus jitters

Eren Sengezer FXStreet

Here is what you need to know on Monday, November 28:

Market mood sours and investors move away from risk-sensitive assets to start the week with China reporting record-high coronavirus cases for the fifth straight day. The US Dollar holds its ground following last week's slide and US stock index futures trade in negative territory in the European morning. The Federal Reserve Bank of Dallas' Texas Manufacturing Survey will be published later in the day. European Central Bank (ECB) President Christine Lagarde will deliver an introductory statement at a hearing before the Committee on Economic and Monetary Affairs (ECON) of the European Parliament in Brussels. Finally, New York Fed President John Williams will speak at an event organized by the Economic Club of New York.

On Sunday, China's National Health Commission reported 40,347 new COVID-19 infections. Meanwhile, hundreds of protestors and police clashed in Shanghai over the weekend as frustrations over strict restrictions boiled over. The Shanghai Composite lost nearly 1% and Hong Kong's Hang Seng fell over 1.5%.

Meanwhile, crude oil prices fell sharply to start the week amid a worsening demand outlook and the barrel of West Texas Intermediate (WTI) dropped to a fresh 2022-low at around $73.50. At the time of press, the WTI was trading near $74, losing 3.5% on the day.

EUR/USD registered its highest weekly close since late June at 1.0402 but started the new week on the back foot. The pair was last seen trading in negative territory at 1.0380.

GBP/USD stays under modest bearish in the early European morning and fluctuates below 1.2100. The UK economic docket will not be featuring any high-impact macroeconomic data releases on Monday.

USD/JPY pushes lower and trades below 138.00 for the first time in two weeks as the Japanese Yen manages to find demand as a safe haven early Monday. Earlier in the day, Bank of Japan (BoJ) Governor Haruhiko Kuroda said that he was expecting the wage pressure to gradually increase with the labor market continuing to tighten.

Gold price dropped to $1,745 during the Asian trading hours on Monday but erased a large portion of its daily losses with the benchmark 10-year US Treasury bond yield falling to its lowest level since early October at 3.62%. XAU/USD was last seen losing 0.15% on the day at $1,752.

Bitcoin moved up and down in a very narrow range over the weekend but lost its traction early Monday. As of writing, BTC/USD was down more than 1% on the day, trading near $16,200. Ethereum dropped below $1,200 on Sunday and extended its slide toward $1,150 at the beginning of the week.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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