Asia Recap: Aussie near 11-year low, gold rallies as epidemic fears hit risk appetite

    Market Roundup

    • U.S. crude stocks rose in latest week -API
    • U.S. may not be immune to epidemic

    Economic Data Ahead

    • (0400 ET/0900 GMT) Switzerland ZEW Survey – Expectations (Feb)

    Key Events Ahead

    • No Significant Events Scheduled

    FX Beat

    DXY: The dollar index consolidated near a 2-week low as investors no longer saw the U.S. economy immune and started to bet the U.S. Federal Reserve will have to cut interest rates to support the U.S. economy. The greenback against a basket of currencies traded 0.1 percent up at 99.11, having touched a low of 98.88 on Tuesday, its lowest since Feb. 13.

    EUR/USD: The euro declined, halting a 3-day rally, as the coronavirus death toll climbed in Italy and several Middle East countries were dealing with their first infections. The European currency traded down at 1.0876, having touched a high of 1.0890 on Tuesday, its highest since Feb. 12. Investors’ attention will remain on a series of data from the Eurozone economies, ahead of the U.S. new home sales figures. Immediate resistance is located at 1.0921, a break above targets 1.0957. On the downside, support is seen at 1.0834 (10-DMA), a break below could drag it below 1.0800.

    USD/JPY: The dollar rose after tumbling to a 1-week low in the previous session on rising expectations of a U.S. rate cut and warning from U.S. health officials on a domestic coronavirus outbreak. The major was trading 0.1 percent up at 110.36, having hit a low of 109.89 on Tuesday, its lowest since Feb. 19. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. new home sales figures. Immediate resistance is located at 110.70, a break above targets 111.12. On the downside, support is seen at 109.91 (21-DMA), a break below could take it near at 109.61.

    GBP/USD: Sterling eased, retreating from a 1-week peak recorded in the prior session amid fears the coronavirus was developing into a pandemic that could cripple global supply chains and wreak far greater economic damage than first thought. The major traded 0.1 percent down at 1.2987, having hit a high of 1.3017 on Tuesday, it’s highest since Feb. 19. Investors’ attention will remain on the trade negotiations, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3023, a break above could take it near 1.3047. On the downside, support is seen at 1.2972, a break below targets 1.2937. Against the euro, the pound was trading flat at 83.70 pence, having hit a high of 83.38 on Tuesday, it’s highest since Feb.19.

    AUD/USD: The Australian dollar plunged to a fresh near 11-year low, amid heightened concerns surrounding the coronavirus outbreak. The Aussie trades 0.3 percent down at 0.6582, having hit a low of 0.6569 earlier, it’s lowest since March 2009. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6611 (23.6% retracement of 0.6750 and 0.6569), a break above could take it near 0.6637 (38.2% retracement). On the downside, support is seen at 0.6558 a break below targets 0.6532.

    NZD/USD: The New Zealand dollar tumbled, hovering towards a 4-month low recorded earlier in the week as the rapid spread of the virus and its impact on global economic activities increased bets for monetary policy easing by global central banks. The Kiwi trades 0.1 percent down at 0.6312, having touched a low of 0.6303 on Monday, its lowest level since Oct. 17. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6347 (23.6% retracement of 0.6487 and 0.6303), a break above could take it near 0.6374 (38.2% retracement). On the downside, support is seen at 0.6282, a break below could drag it below 0.6255.

    Equities Recap

    Asian shares plunged as a U.S. warning to Americans to prepare for the possibility of a coronavirus pandemic drove investors to safe-haven assets.

    MSCI's broadest index of Asia-Pacific shares outside Japan slumped 1.3 percent.

    Tokyo's Nikkei fell 0.8 percent to 22,426.19 points, Australia's S&P/ASX 200 index slumped 2.3 percent to 6,708.10 points and South Korea's KOSPI declined 1.3 percent to 2,076.77 points.

    Shanghai composite index eased 0.8 percent to 2,987.93 points, while CSI 300 index traded 1.2 percent down at 4,073.02 points.

    Hong Kong’s Hang Seng traded 0.9 percent lower at 26,657.41 points. Taiwan shares shed 0.9 percent to 11,433.62 points

    Commodities Recap

    Crude oil prices rebounded after data from industry group the American Petroleum Institute showed U.S. crude oil and gasoline stocks rose in the most recent week, while distillate stocks dropped. International benchmark Brent crude was trading 0.3 percent higher at $55.15 per barrel by 0557 GMT, having hit a low of $54.64 on Tuesday, its lowest since Feb. 12. U.S. West Texas Intermediate was trading 0.3 percent up at $50.21 a barrel, after falling as low as $49.73 on Tuesday, its lowest since Feb. 11.

    Gold prices surged, hovering towards a more-than 7-year high hit earlier this week, as a warning from the United States over the domestic spread of the coronavirus outbreak rattled global markets. Spot gold was trading 0.6 percent up at $1,644.22 per ounce by 0605 GMT, having touched a high of $1689.38 on Monday, its highest since January 2013. U.S. gold futures eased 0.2 percent to $1,647.

    Treasuries Recap

    The yields on 10-year and 30-year U.S. Treasuries teetered near record lows.The 10-year U.S. Treasuries yield plunged to a record low near 1.30 percent.

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