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Chinese Yuan Weakens Against the US Dollar Over Fears of Coronavirus Epidemic

The optimism around the US-China phase one trade deal has faded and the Chinese yuan has weakened against the US dollar over rising fears of an outbreak of coronavirus epidemic impacting China’s economic growth. At the time of writing, USD/CNH is trading at around 6.900.

The number of affected patients across major Chinese cities like Beijing and Shanghai have increased significantly while more cases were being reported outside China, in locations including the US. In the previous session, the yuan lost around 0.55% of its value over concerns that the epidemic may spread severely.

Ahead of the upcoming Chinese New Year holidays, the threat of the virus spreading has increased significantly, as this is a key period for travel in and out of China. Markets remain worried that the outbreak could turn out to be as severe as the SARS outbreak in 2002-03 which had caused a slowdown in tourism across Asia and affected economic growth in the region.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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