Dampened market sentiment due to coronavirus supports currencies

TOKYO- The dollar reached two-month high against several major peers while Australian dollar and the yuan fluctuated on Thursday as markets armed themselves from assets subject to China’s coronavirus contagion.

The US Federal Reserve, while restricting interest rates as predicted on Wednesday, also pointed finger to the coronavirus as the major contributor of uncertainty for the economic forecast.

As the new strain of coronavirus rapidly spread in China and across its trade associate in Asia and Europe, the dollar is slowly becoming the safe haven currency.

The dollar was recorded to have performed the best out of all the major currencies this January, with greenback index greatly advancing to 1.6% this month, hitting a two-month high record. It last traded at 98.033, firm and neutral from Wednesday’s record of 98.037.

The yen and Swiss franc tailed behind the greenback landing on second and third place as safe-haven currencies.

The yen traded at 109.06 yen per dollar JPY=, with previous gain of 0.14% on Wednesday. Overall, it was 0.3% lower against the greenback this January.

The Swiss franc switched at 0.9729 franc per dollar.