Dollar slips on caution U.S. may not be immune to epidemic
TOKYO - The dollar nursed losses on Wednesday as rising expectations of a U.S. rate cut and warnings from U.S. health officials about the spread of the coronavirus called into question the perceived strength of U.S. financial assets.
Against the yen, the U.S. currency traded at 110.37 yen, gaining 0.1% in Asia on Japanese buying before month-end but still almost two full yen below its 10-month high touched last Thursday. Growth in China looks set to fall further from a three-decade low of 6.1% last year after the outbreak caused massive economic disruptions, while both the euro zone and Japan are seen on the brink of recession.A top official at the U.S. Centers for Disease Control and Prevention urged Americans to begin preparing for coronavirus to spread within the country, while another official said it was no longer a question of if, but when, the virus would become a pandemic.
Fed Vice Chair Richard Clarida said late on Tuesday the Fed is “closely monitoring” the escalating coronavirus outbreak but it is still too soon to gauge if it would require a change in monetary policy. “Markets had been under-estimating the risk of coronavirus but I think that phase is over by now,” said Tatsuya Chiba, manager of forex at Mitsubishi Trust Bank.
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