The Euro was on course for its biggest intraday gain over the USD on Thursday since August 2019. Stock markets and developing world currencies continued to tumble over the panic of the spread of the coronavirus. With new cases springing up across the globe including the US, Italy and Norway with investors beginning to worry about the health of the global trade sentiment moving forward. The market is expecting the coronavirus to continue spreading at least in the short-term, which will spell disaster for many currencies around the world, especially those that are risk related.
Despite rising fears, EUR gains on USD
The European single currency rose more than 1% against the US dollar at its strongest point on Thursday, the biggest single day move since 2019. The gains for the euro came after further weakness for the US dollar. The US discovered its first case of confirmed coronavirus on US soil. The case was unexplained, which stoked fears about an outbreak in the world’s largest economy. After witnessing the turmoil caused in China, USD investors panicked over the thought of the same happening for USD. With negative headlines hitting the US dollar, the Euro was lifted despite Italian quarantines being put in place in some of its towns near to Milan and Venice.
To add fuel to the coronavirus fire, the mortality rates of the disease are increasing, the the number of confirmed global infections above 82,500 on Thursday and deaths coming in at 2,810. The mortality rate now sits at around 3.4%, which is up from the below 2% figures it sat at when the disease was only in China.
Eurozone prepares for outbreak which Germany’s health minister describes as only a matter of time
Looking ahead with the Eurozone, it has begun preparations for its own outbreak crisis. In Italy, an area of infection an area so-called “community spread”, where those with no history of travelling to other affected areas or had contact with affected people are transmitting the viral form of pneumonia from person-to-person. The German health minister spoke towards the end of the week highlighting that it is only a matter of time until the Eurozone witnesses its own outbreak crisis. Should this be the case, EUR will surely dwindle from its current high positioning.
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