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Forex - Yuan Falls More Than 1% Amid Continuing Virus Worries 

Published 03/02/2020, 03:35 pm
Updated 03/02/2020, 03:38 pm
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By Alex Ho

Investing.com - The Chinese yuan fell more than 1% against the U.S. dollar on Monday in Asia amid continuing coronavirus worries.

The USD/CNY pair gained 1.2% to 7.0173 by 11:30 PM ET (03:30 GMT).

On Monday, China’s authorities reported that the death toll from the new coronavirus rose to 361 in China, while confirmed cases increased to 17,205.

Multiple countries including Australia, Singapore and the U.S. ramped up border controls and banned entry by foreign nationals who have recently visited China.

Last week, the World Health Organization declared the virus outbreak a global emergency but said travel and trade ban were unnecessary.

The People’s Bank of China cut the rates on the funds by 10 basis points on Monday and said it will inject 1.2 trillion yuan ($174 billion) into the financial system as the central bank seek to ensure ample liquidity.

While not a directional driver, the Caixin/Markit Manufacturing Purchasing Managers' Index eased to 51.1 from 51.5 in December, missing expectations but remaining above the 50-mark that separates growth from contraction for the sixth straight month.

The EUR/USD pair inched down 0.1% to 1.1081.

On Friday, data showed German retail sales slumped 3.3% in December, a much weaker number than expected. The French economy also unexpectedly contracted in the final quarter of last year, with GDP shrinking 0.1%, the first time it has contracted since Emmanuel Macron took over as President.

Meanwhile, the GBP/USD pair fell 0.3% to 1.3163 after the U.K. exited the European Union last week and said it would set its own agenda, creating uncertainties about future talks with the European Union.

The AUD/USD pair and the NZD/USD pair both edged up 0.1%.

The U.S. Dollar Index traded 0.1% higher to 97.315.

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