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A wave of risk-off flows rolled through the...>

FOREX
FOREX: A wave of risk-off flows rolled through the FX space after Chinese equity
index futures re-opened on the back foot, weighed on by a growing worry about a
new Chinese coronavirus in the run-up to the LNY holidays which typically see
millions of people travel across the country. U.S. Pres Trump's traditionally
combative Twitter rhetoric did further damage to risk sentiment. Safe haven JPY
and CHF picked up a bid, with USD/JPY dropping below Y110.00. Elsewhere, the yen
showed little reaction to the BoJ's monetary policy decision amid no surprises
on that front. High-beta currencies were pressured, NOK lagged all G10 peers.
- That flight to safety coincided with a slightly higher than expected PBoC fix.
USD/CNH challenged CNH6.9000, peaking a few pips north of there. USD/CNY us yet
to break above CNY6.9000, after topping out just shy of it.
- Risk aversion had predictable consequences for USD/Asia, with KRW suffering
the heaviest losses amid fear that the Chinese virus might spread abroad.
- The key data releases today are German ZEW survey, UK labour market report and
Canadian manufacturing sales. BoE Gov Carney speaks at the WEF. U.S. Pres Trump
will also be in Davos, when the impeachment hearings get underway in the U.S.

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