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EUR/USD hits 7-month high on coronavirus pandemic fears

  • EUR/USD hit seven-month highs in Asia as stocks tanked on virus fears. 
  • Euro has become a haven currency due to ECB’s negative rates and Eurozone’s current account surplus.

The buying interest around the single currency remains strong on Friday with investors selling risk in favor of safe havens on reports stating the coronavirus is looking like a global pandemic. 

EUR/USD is currently trading near 1.1234, having hit a seven-month high of 1.1249. 

Safe-haven Euro

The common currency is drawing haven bids with global equities reporting sharp losses. The S&P 500, Wall Street’s benchmark equity index, fell by 3.39% on Thursday. The index futures are currently reporting a 1.2% drop. Asian stocks also took a beating with Japan’s Nikkei falling by over 600 points. 

The Euro has been benefitting from risk-off and flight to safety, which isn’t surprising, given the European Central Bank is running a negative interest rate policy and the single currency is backed by Eurozone’s large current account surplus. 

Looking forward, the market volatility is likely to remain high as coronavirus pandemic is showing no signs of slowing down and EUR/USD is expected to trade better bid. 

On the data front, German Factory Orders (Jan) are scheduled for release at 07:00 GMT. Meanwhile, the US Nonfarm Payrolls will hit the wires at 13:30 GMT. 

Technical levels

 

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