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How CNY would affect the currency pair Euro vs US Dollar

This Wednesday, 22 January 2020, the Euro-dollar exchange rate remains stable, while the yuan is significantly losing ground, the main reason is the outbreak of coronavirus in China.

 

The Chinese authorities are in active dialogue with the international community and its population, indicating that they had taken extensive measures to prevent the spread of coronavirus. Compared with 2003, when China started the SARS epidemic, the Chinese authorities are active in social policy and all the actions remain transparent.

 

Rodrigo Ketri, which is responsible for currency strategy at National Australia Bank in Sydney, says - “we believe that traders will exercise extreme caution in the near future.” Today, however, Chinese authorities spoke about the fact that the country is all right, it's worth noting that this statement brought some relief to the markets.

 

Please note that the first case of an outbreak of pneumonia was dated 12 December 2010, in the Chinese city of Wuhan. The causative agent of the disease was previously unknown coronavirus - 2019-nCoV, the genome of the virus has decrypted and published. According to the latest data, the number of confirmed cases of infection with a new type of coronavirus in China reached 440, nine people died.

 

Currency, the Director of Societe Generale Kyosuke Suzuki says - “the obvious parallel is pursued by the people, is SARS. Although we don't know yet how dangerous the virus will be new, yet it seems that the markets do not perceive it as bad as the pandemic of 2002. While almost all companies have banned travel to Hong Kong, and while such a reaction is not observed”.

 

We remind you that as a result of SARS 2002 affected more than 8 thousand people in 37 countries, about 800 cases have been fatal.

 

At the moment the currency pair EUR / USD is trading in the range of USD 1,1084 compared to 1,1082 USD at the close of the previous session. The exchange rate of the dollar against the yuan rose 0.15 percent to CNY 110,03 compared to 109,87 on the eve of CNY, the exchange rate of the Euro against the yen also rose by 0.15% to 121,95 CNY CNY against 121,77.

 

The dollar against the yuan on Wednesday rose 0.07 percent to 6,9043 CNY /1 USD against 6,8995 CNY /1 USD the day before. Today, Wednesday, the dollar rose as traders became safer to treat the emergence of China is similar to the pneumonia virus. However, the growth of currency was minimal and cautious sentiment remained.