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Mark McCormick, Global Head of FX Strategy at TD Securities offered his take about the effect of the coronavirus outbreak on the FX market.

Key quotes:

“The major themes combine the feedback loop between the impact of the coronavirus and the state of the global economy. The US election is another one, but for now, the major driver rests on the magnitude of the outbreak and when things will start to stabilize. The guidance from Apple has spooked risk markets again overnight.”

“A stronger USD is the path of the least resistance in the very short-run. We likely get more stress in the short-run, and we note that besides Europe, the discounts across currencies aren’t significant enough yet to call a bottom.”