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Safe havens back in business as coronavirus worries spike

Denise Jackson

Worries about the spread and risk of the coronavirus which the forex markets experienced earlier this month appeared to come back on Thursday.

Despite the fact that the Chinese province of Hubei said earlier in the week that a record low number of cases had been registered, this changed course as the week progressed.

Now, it has reported a big rise in incidence.

As of Wednesday, it said that there were 14,840 new cases – which was far from the figure of 1,638 new cases which was claimed the day before.

There is also evidence that the death toll is rising too.

In Hubei alone, the death figure had gone up by over 200 to a new position of 1,310.

The development was also associated with suggestions that the previous modes of diagnosis were perhaps not up to scratch – and there was a suggestion that new methods of diagnosing the disease, which has so far spread to more than 20 other nations, could have fuelled the reporting rise.

The Japanese yen, which had slipped in its pair against the US dollar to its worst performance in three weeks, went back up as a result of the news.

It was spotted up by 0.15% over the course of Thursday and was seen at 109.94 yen at one stage.

The onshore Chinese yuan, which is traded inside China, went down by a tenth of a percentage point in its pair against the US dollar and was seen at 6.9792 in that pair at one stage.

The offshore version of the currency, which is traded on the open market around the world, saw a slightly worse performance.

It went down by 0.12% to reach 6.9813 at one stage.

Other currencies which had begun to see big rises earlier in the week when the good news about coronavirus incidence drops was released now suffered.

In New Zealand, for example, a drop in value of a quarter of a percentage point was noted in the country’s currency pair with the US dollar.

The New Zealand dollar was down to $0.6451.

In Australia, a country whose currency value is highly dependent on China due to trading relationships, the Australian dollar was down by 0.19% in its pair with the greenback.

It was spotted at $0.6728 at one point.

Around the world, the US dollar was celebrating after it appeared to come near to its best performance in over two years in its pair with the single European currency.

It was noted at $1.0872 in this pair at one moment, a development due in part to figures released last week which sung the praises of the country’s labour market.

The British pound, was holding firm at around $1.2954 in its pair with the US dollar.

This pair had recently hit its worst point in two and a half months, in part because of continued fears over whether Prime Minister Boris Johnson will go tough when negotiating with the European Union over a future trading relationship.

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Denise Jackson
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