The investor sentiment in Germany deteriorated due to coronavirus

Andrew Cummings
February 20, 2020

The British pound remained under pressure as Britain and the European Union laid out conflicting views on how to proceed with trade negotiations.

"Coronavirus is increasingly seeking like a very long-time period concern and therefore, at the very least for forex markets, it will be playing 2nd fiddle", said Kyosuke Suzuki, supervisor of currencies at Societe Generale.

Worries about the euro zone's economy after a string of weak data have kept safe-haven government debt like Germany's well-supported.

Europe's biggest economy posted zero growth from the previous quarter while separate data showed euro zone gross domestic product grew 0.1 per cent quarter-on-quarter in the fourth quarter, in line with forecasts but the weakest since 2014.

Norway's crown, closely correlated with global growth and trade, plunged to a 19-year low of 9.3365 against the US dollar., down 0.7% on the day.

"The end of 2019 and the beginning of 2020 saw a worse-than-expected development of the German economy", said Wambach. adding that "economic development is rather fragile at the moment".

"I imagine the currency sector is going a bit as well much in conversing about easing choices", mentioned Hideki Kishida, senior economist at Nomura Securities.

In Asia, the Chinese yuan and the Japanese yen held steady as traders assessed the spread of an outbreak of a new coronavirus both inside and outside China. The month-to-month drop in the expectations gauge was the biggest since the middle of previous year, and this headline usually doesn't swing by that much on a monthly basis.

U.S. Treasury yields also fell.

Most market players expect stronger growth in the United States although data published on Friday provided a mixed picture.

US main retail profits was flat final month, lagging expectations of.3% progress while its rise in December was revised down to.2% from a beforehand described.five%.

Industrial production also shrank more than expected by 0.3%.

Nonetheless, economists have blamed a single-off things this kind of as heat weather and output suspensions stemming from problems at Boeing for the downbeat numbers.

The dollar index stood at 99.131, near Friday's 4 1/2-month high of 99.241.

China reported 1,749 new confirmed cases of coronavirus infections, the lowest daily rise since January 29, as the death toll passed 2,000.

China, the world's second-largest economy, is still struggling to get its manufacturing sector back online after imposing severe travel restrictions to contain a virus that emerged in the central province of Hubei late a year ago. Nationwide, the overall bacterial infections topped 70,000.

Germany's 10-year benchmark yield initially fell to -0.42%, near to Tuesday's two-week low of -0.43%.

The onshore yuan was also up, trading.17% increased at 6.9760 for every greenback by midday.

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