As traders calmed over the spread of the pneumonia-like virus in China, the USD edged higher, while Germany’s DAX index posted a record high.
European shares bounced back as China’s efforts to contain the coronavirus seemed to have eased concerns of a global pandemic.
Frankfurt’s DAX (GDAXI) outperformed its regional peers, following a survey which indicated that German investor morale was at its highest since 2015, a result of the US-China trade truce.
By 09:10 GMT, the US Dollar Index Futures increased by 0.1% at 97.42.
The yen dropped 0.1% against the dollar, with the pair trading at 109.97.
GBPUSD fell by 0.1%, hitting 1.3043, while EURUSD traded 0.1% at 1.1079.
According to Chinese authorities, at least nine people have died after being infected with the virus.
In a Reuters report, Kyosuke Suzuki, director of currencies at Societe Generale, said:
The obvious comparison people are making is with the SARS. While we still don’t know how lethal the new virus will be, my sense at the moment is that markets are not taking it as dire as SARS.
Back then, virtually every company was banning travel to Hong Kong. We haven’t seen that kind of reaction yet.
Around 800 deaths were confirmed in the 2002 SARS pandemic, which infected more than 8,000 people across 37 countries.
Elsewhere, the Bank of Canada (BoC) prepares for its rate-setting meeting later today, with markets widely expecting no changes in the policy rate.
However, according to Francesco Pesole, an analyst at ING, the Canadian dollar is expected to face imminent downside risk.
Investor sentiment around the prospect of BoC easing has shifted significantly in the past few months…we suspect that a downward revision to the GDP forecasts .… may be on the cards. With any significant change in the monetary policy stance unlikely for now, those projections have the potential to determine most of the market reaction.
By 09:05 GMT, the USDCAD pair was up by 0.1%, trading at 1.3077.
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