The Australian dollar has tumbled and the ASX (Australian Stock Exchange) wiped off all the gains of this year so far.
At the time of writing, the AUD has fallen to approximately 0.65 US cents, consequently reaching a fresh low after 11 years. This is bad news for Australians wanting to travel, as they will have less money for every dollar they use. However, exporting industries can find solace in the weakening AUD as their services and products will become more competitive.
The effects of the virus exposed the dependency of Australia's economy on China. This fueled questions on whether Australia is too reliant on China.
So far, the tourism and the import/export sector keeps being hit but the spillover is being felt on other industries like retail, transportation, fishing etc...
Asian shares slump
In Asia, shares fell today and it happened after President Donald Trump made announcements that the US will now step up its fight against the Coronavirus.
Japan leads the way among the worse performing markets, and this is weighed by concerns that the 2020 Olympics might be cancelled. The Olympics are set to start in July but it remains to be seen whether the Coronavirus will prevent it from happening or not.
Here's what happened;
- The Nikkei 225 lost 2.1% (Japan)
- The S&P/ASX 200 dopped 0.8% (Australia)
- The KOSPI dropped 0.9% (South Korea)
- The Hang Seng lost 0.7% (Hong Kong)
The fear that the games might be cancelled affected shares of sportswear companies and other sectors connected with the planning of the Olympics.
US Futures down more than 1.5%
"There's no reason to be panicked," Trump said on Wednesday evening at a White House press briefing. The US President said that they are well-prepared for an outbreak and at the moment, Vice President Mike Pence is in charge of the response to an outbreak in the country.
Meanwhile, there was a new case in California, and this is the first case of someone who did not travel to China or has been in contact with anyone who travelled recently.
Microsoft Corp. MSTF, sent out warnings that it will not be able to meet its quarterly forecasts due to the current market situation.
The situation on Wall Street did not get any better as the S&P 500 and the DOW fell for a fifth day in a row.
- Dow Jones Industrial Average DJIA fell 123.77 points
- S&P 500 SPX lost 11.82 points
On the other hand, NASDAQ Composite, COMP added 15.16, ending a 4-day losing streak.
Financial Events to watch for today
18.30 GMT - Japan Unemployment Rate (Jan)