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Dollar Gains after GDP, Coronavirus Worries

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The U.S dollar continued to inch higher against most of its key G-20 currency trade partners on Monday, during the Asian trade hours.

Traders were digesting a fairly good non-farm payroll (NFP) report as well as looking for safe haven assets as worries about the coronavirus continues to shock the global financial markets.

These same worries about the epidemic kept trade exposed Forex assets, like the Australian and New Zealand dollars on the back foot in early Monday trading. Safe haven currencies like the Japanese yen and the Swiss franc are also trading higher as risk-off sentiment takes hold.

Looking at the AUD/USD currency exchange rate, this Forex market is trading at a near ten year low at 0.6657. The Australian dollar was last trading at 0.6680. The NZD/USD Forex market was near a two month low at 0.6397.

The Japanese yen was a tad firmer against the greenback and in the EUR/USD currency exchange rate was trading near 1.2890. This low price point has not been seen since November of last year.

Forex Traders Look for Safe Haven and Liquidity Boosting the Dollar

Forex traders remain on edge over the coronavirus outbreak as more people have died and the infection continues to spread.

Today, millions of people were supposed to or are returning to work, after the Lunar New Year break. However, many white-collar workers stayed home as business remained closed.

Many Chinese cities look like ghost towns, and have been this way for two weeks. Traders are trying to gauge the economic damage and see how quick the world’s second largest economy can now recover.

The death toll from the coronavirus spiked high on Sunday and this outbreak has now killed more than the SARS epidemic. The number dead is now at 908 on mainland China. There have been, to date at the time of this report, 40,170 people infected.

As far as economic data is concerned, Friday’s NFP showed that jobs growth accelerated in the U.S. for the month of January.

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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