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According to Piotr Matys, Senior Emerging Markets FX Strategist at Rabobank, the CEEMEA currencies remain driven by the latest news regarding China’s coronavirus.

Key Quotes:

“In the early hours of trading we witnessed signs of stabilisation following yesterday’s sell-off in stocks (the S&P 500 Index plunged 1.57%). However, this proved short-lived as travel restrictions announced by Hong Kong instead of improving sentiment spooked the markets, which are already on edge.”

“It is fair to assume, therefore, that the worst may yet to come. Any positive impact on the CEEMEA currencies of the phase one trade deal could be fully offset by rising concerns that the coronavirus will have serious negative implications not only for China, but for the global economy as well.“

“The plunge in oil prices to the lowest level so far this year provided USD/RUB with sufficient upside traction to reach the December 23 high at 63.1057. Unless fresh news from China provide concrete evidence that the virus is under control, the path of the least resistance will remain to the upside with 64.49 as the next potential target for USD/RUB.”