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· The yen was set for its worst week in two-and-a-half years on Friday, as fears over the creeping spread of the coronavirus epidemic drove funds out of Asia and looking for safety in the U.S. dollar, gold and bonds.

Though it barely budged on Friday, the yen has lost 2% against the dollar in the previous two days, due to weak Japanese economic data and coronavirus worries.

China's tightly-managed yuan CNY= is sitting at a two-month low of 7.0286 per dollar.

The Australian dollar AUD=D3 traded at an 11-year low of $0.6603 and the kiwi NZD=D3 at a four-month low of $0.6310.

Against a basket of currencies, the dollar is sitting just below a three-year peak hit overnight =USD.

The euro sank to a three-year low this week and last traded at $1.0790 EUR=. The pound is a fraction firmer than an almost three-month low touched overnight at $1.2890 GBP=.





· EUR/USD short-term technical outlook

The EUR/USD pair is hovering around the 1.0800 figure stuck in a range for a second consecutive day. There are some tepid signs of downward exhaustion, which anyway are not enough to confirm a bottom. In the 4-hour chart, the pair remains below a bearish 20 SMA, although the pair is barely below it. Technical indicators have recovered from oversold levels, but lost directional strength within negative levels, maintaining the risk skewed to the downside. The pair needs to break the 1.0770 support to be able to extend its slump.

Support levels: 1.0770 1.0725 1.0690

Resistance levels: 1.0840 1.0885 1.0910





· USD/JPY Price Analysis: Eyes on long-term resistance-turned-support trendline

USD/JPY steps back to 112.00, down 0.07%, during the pre-European session on Friday. Even so, the pair stays above the multi-month-old falling trend line on a weekly basis.

Should the pair closes the week beyond 111.40 resistance-turned-support, its run-up to 112.40 and November 2018 high near 114.20 can be expected.

During the pair’s extended rise past-114.20, October 2018 top surrounding 114.55 will be on the bulls’ radar.

Meanwhile, a downside break of 111.40 on the weekly closing basis can recall a 200-week SMA level of 109.70.

However, 111.00 and January 2020 peak close to 110.30 may offer intermediate halts to the declines.



CORONAVIRUS OUTBREAK

· China reported an upward spike in Covid-19 infections Friday, reversing what health authorities claim has been a steady decline in the number of daily confirmed cases arising from the coronavirus for the past two weeks.

Health experts said the sudden jump seems to indicate Covid-19 hasn't peaked, which runs contrary to the findings of a new medical study claiming the outbreak peaked in the last week of January.

The global casualty count as of 10:03 a.m., Friday, Hong Kong time, stood at 76,716 cases and 2,247 deaths. Of the new toll, 75,465 cases are in China, as well as 2,236 deaths.

There are now 11 deaths worldwide. These include the first death in South Korea confirmed Thursday, two deaths in Japan on Thursday and two deaths in Iran reported Wednesday. There was a second death in Hong Kong Wednesday.

New cases in South Korea jumped to 73 by Thursday, tripling the number of cases in the country. Korea Centers for Disease Control and Prevention (KCDC) reported 53 new cases Thursday and 20 Wednesday. This unexpected jump brought total cases across the country to 104. Most of the patients in South Korea are from the southern city of Daegu and its environs.



· China finds spike in coronavirus cases in jails, officials fired

The new coronavirus has infected 234 people in two prisons outside the province at the center of the epidemic and top officials deemed responsible for the outbreaks have been fired, authorities said on Friday.

The infections found in the two jails, in the northern province of Shandong and the eastern province of Zhejiang, made up most of the 258 newly confirmed cases on Thursday outside the central province of Hubei, where the most cases have occurred.



· China says January-February trade to take sharp hit from virus outbreak

China’s exports and imports will fall sharply in January and February as the coronavirus outbreak severely disrupts activity in the world’s second-largest economy, the commerce ministry said on Friday, adding more measures are being studied to support companies.

With transport restrictions still in place in many parts of the country to contain the spread of the virus, many companies are struggling to resume production due to a shortage of workers and raw materials, while others can’t get their finished products out. Parts shortages are starting to cascade through supply chains worldwide.

China is the world’s largest exporter of goods, with shipments accounting for nearly 20% of China’s gross domestic product (GDP). Analysts forecast the supply and demand shocks from the crisis could cut first-quarter GDP growth by up to half from 6% in the previous quarter.



· Overall, for foreign-invested enterprises in Shanghai, Shandong, Hunan and other areas, the rate of resumption of work has topped 80%, a representative for China’s Ministry of Commerce said Friday at a press conference, according to a CNBC translation of his Mandarin remarks.

For Guangdong, Jiangsu and other major foreign trade provinces, the resumption of work has been rapidly increasing, the ministry said, noting that key businesses in foreign trade in provinces such as Zhejiang and Shandong have a resumption of work rate of around 70%



· Sales of China’s passenger vehicles tumbled 92% in the first 16 days of February, as compared to the same period last year, data from the China Passenger Car Association showed, according to Reuters.





· The impact of the new coronavirus outbreak on global growth will be a key issue at this weekend’s meeting of G20 finance leaders, Bank of Japan Governor Haruhiko Kuroda said, underscoring growing concern over the fallout from the epidemic.

Kuroda said it was not yet time to discuss whether additional monetary easing was needed to prevent the virus outbreak from damaging Japan’s economic recovery.

But the BOJ stood ready to take additional steps “without hesitation” as needed, he told lawmakers before departing for the Group of 20 finance gathering in Riyadh that kicks off on Saturday.





· Singapore still has some financial buffer if more measures are needed to tide the economy through the current coronavirus outbreak, said Indranee Rajah, the country’s second minister for finance and education.

“And we do still have some buffer in case any additional measures are needed,” she said.



· Pro-democracy protesters have all but vanished from the streets of Hong Kong over the past month as residents avoid the new coronavirus, but the outbreak has broadened discontent with the city’s leadership and China’s influence on the financial hub.

Some business leaders and pro-Beijing politicians have joined pro-democracy and union figures in attacking Carrie Lam’s administration for what they see as an uncoordinated response to the virus and its refusal to seal the border with mainland China, which might have prevented infections.



· Oil prices fell on Friday amid concerns over fuel demand as the coronavirus epidemic spread further beyond China, while major crude producers stood pat on any early action to cut output to support the market.

Brent crude was down 28 cents, or 0.5%, at $59.03 a barrel by 0332 GMT, while U.S. crude was also off by 28 cents, or 0.5%, at $53.60 a barrel.

On Friday South Korean authorities confirmed 52 new coronavirus infections, Yonhap reported. The streets of Daegu, the country’s fourth-largest city, were deserted on Thursday after dozens of people there went down with the pathogen in what authorities described as a “super-spreading” event.

In China itself, the world’s biggest importer of crude oil, new cases also rose on Friday from the day before even as Beijing presses on with efforts to contain the spread that has largely paralyzed the world’s second-biggest economy.

“I think there is a lot of reason for caution right now, as the impact of coronavirus on demand is still unclear,” Stratfor oil analyst Greg Priddy said by email.

“If it begins to look like the impact will be modest, that could affect Russia’s decision at the March 5-6 OPEC+ meeting on whether they are willing to endorse a further cut,” he added.

Russian Energy Minister Alexander Novak said on Thursday that global oil producers understood that it would no longer make sense for the Organization of the Petroleum Exporting Countries (OPEC) and its allies to meet before their gathering.


Reference: Reuters ,CNBC, FXstreet