USD/RUB gains upside traction amid concerns about the coronavirus– Rabobank

According to Piotr Matys, Senior Emerging Markets FX Strategist at Rabobank, the CEEMEA currencies are engulfed in a risk off mood due to escalating concerns about the coronavirus.

Key Quotes:

“China’s death toll reportedly increased to at least 80. Confirmed cases in China rose sharply to more than 2,700. More than 30,000 people are under observation and around 40 million are in a lockdown. There is also more evidence that the virus has an incubation period of around two weeks before those infected start to show symptoms. This implies that the number of people affected is likely to increase further.”

“The sharp fall in various commodities reflects growing market concerns about the negative implications of the coronavirus not only for China, but for the global economy as well. Oil prices plunged to the lowest level so far this year sending USD/RUB above the key technical level around 62.20. The squeeze has the potential to extend towards the December 23 top at 63.1057 next (Figure 1). If this target is obtained, the 76.4% Fibonacci retracement at 63.6379 will be next.”