Forex Today: Calm amid China’s coronavirus storm; US data in spotlight

Here is what you need to know on Tuesday, January 28: 

China’s fast-spreading coronavirus epidemic and the rising death toll ensued a slump in the Asian equity markets, as investors remained wary about the contagion risks and its implications on the global economic growth.

China’s National Health Commission (NHC) reported confirmed coronavirus cases at 4,515 and death toll at 106 while the first case of the virus was confirmed in Germany.

However, a sense of calm prevailed across G10 fx space, with most majors in tight trading ranges, as the US dollar held steady near two-month highs against its main competitors. The US Treasury yields traded modestly flat while the US stock futures rebounded over 0.50%.

USD/JPY held onto minor recovery gains around 109.00 while the Antipodeans renewed multi-week lows. AUD/USD breached 0.6850 after the Australian NAB Business Survey disappointed.

The Kiwi hit a new seven-week low at 0.6536, tracking the weakness in the Chinese yuan. Meanwhile, the Canadian dollar was undermined by weaker oil prices, as USD/CAD tested the 1.32 handle.

EUR/USD traded close to 2020 lows on 1.1000 despite the upbeat German IFO survey. GBP/USD stalled its overnight bounce and traded flat in mid-1.30s, with all eyes on the Bank of England (BOE) base rate decision and post-Brexit trade talks with the EU.

Amid fragile market mood, gold prices consolidated the recent gains around $1480 while oil prices traded on the back foot, extending a week-long losings streak.

Cryptocurrencies traded with moderate gains, with Bitcoin trading above $9,000 mark.

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