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Dollar and Yen find Support over Coronavirus

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Safe have Forex asset classes like the liquid U.S. dollar and the Japanese yen were firmer during the Asian trade session on Tuesday.

Both countries saw their government debt also in demand as traders looked for safe haven harbor over coronavirus fears.

The World Health Organization said that the spread of the virus in china could be the “the spark that becomes a bigger fire” around the world.

The Wuhan strain of the coronavirus has killed over a thousand people in China. This is according to China’s health officials. They have also reported a drop in new cases.

The safe haven U.S dollar, the world’s reserve currency, is trading at a four month high against the euro at 1.0910.

The dollar index, which measures the greenback against six other currencies, is also near a four month high at 98.832.

The safe haven Japanese yen is also trading fairly stable against the U.S. currency. The benchmark USD/JPY Forex market is trading at 109.75 yen. However, the yen is gaining ground against other Asian and Pacific Rim currencies on Tuesday.

The financial markets in Japan are closed for a public holiday making volume in the region thinner than usual.

Fed Chair Jerome Powell to Speak before Congress. Dollar Traders to Pay Attention

Today, traders will be watching the start of Federal Reserve Chair Jerome Powell at his bi-annual Congressional testimony.

He will deliver remarks in front of House Financial Services Committee and Senate Bank Committee.

Traders are going to be listening to his tone. If he is upbeat, thanks to last week’s better than expected non-farm payroll (NFP), this could be a boost for crude.

On the economic calendar, the United Kingdom will be releasing their fourth quarter gross domestic product (GDP). Bank of England Governor Mark Carney is also delivering commentary.

The economic calendar out of Europe and Canada are quiet today.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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