Euro Mixed amid Spreading Coronavirus Fears, Worsening German Business Climate

The euro was mixed today amid spreading fear of the coronavirus that has started in China. The shared 19-nation currency fell versus its safe counterparts but performed better versus other rivals. The euro was particularly strong against commodity currencies. There was just one major macroeconomic report released in the eurozone today, and it was unfavorable to the region’s currency.
The death toll from the virus has reached 81 people. The total number of infected people worldwide has exceeded 2,500. While the vast majority confirmed cases were in China, isolated cases were registered all around the world. The resulting fear caused the stock market to tank, while safer assets rallied.
The Ifo Business Climate Index dropped from 96.3 in December to 95.9 in January. That is instead of rising to 97.1 as analysts had predicted. The report commented on the result:

This was due to companies’ more pessimistic outlook for the coming months. In contrast, the indicator of the current situation rose slightly. The German economy is starting the year in a cautious mood.

Going forward, the euro will react to changes in the market sentiment and eurozone economic releases. Friday will be especially rich in terms of macroeconomic reports, including GDP and CPI indicators for various European countries.
EUR/USD fell from 1.1030 to 1.1018 as of 16:50 GMT today. EUR/JPY was at 120.08 after closing at 102.49 on Friday and opening at 102.13 on Monday. EUR/AUD jumped from 1.6187 to 1.6303.

If you have any questions, comments, or opinions regarding the Euro, feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *