Coronavirus Dominates the Market

GBP

A relatively data-light week ahead in the FX market for both GBP and EUR, with UK consumer confidence being the only data drop on Friday morning.

The G20 Summit took place over the weekend, in which UK officials criticised the EU over its indecision regarding the mandate presented for post-UK trade talks. The relationship between the UK & EU is strained and the tense mood suggests complications in the future regarding any trade deal. Negotiations between both parties are expected to restart in March.

GBP this morning has dropped around 0.5% against both the EUR and USD amid concerns over the coronavirus. FTSE 100 is down more than 2% this morning.

EUR

An uplift in German and Eurozone PMI figures last Friday strengthened the Euro, whilst maintaining its gains this morning.

The main headline sweeping across the financial markets is the continual spread of the coronavirus, with Italy announcing the largest number of cases in Europe – 150 and at least 3 deaths. Austria have announced a halt in direct trains between the two countries with surrounding parties expected to follow suit. Stock markets in Europe have opened lower whilst Milan’s main index was worst hit, falling more than 4%.

USD

The USD has dominated the currency market amidst fresh fears over the rise of the coronavirus. The price of Gold has surged to its highest level in seven years as investors flee the US Dollar to seek a safer place for their money – up 2% not seen since February 2013.

There are no major macroeconomic data releases from the US today however, consumer confidence drops in on Tuesday and durable goods on Thursday along with GDP, which is forecasted to show a 0.1% growth from the previous quarter. Core personal spending, Fed’s preferred inflationary measure, will also be released on Friday.