New Zealand's government has temporarily banned entry to this country of foreign nationals travelling from, or through China, and domestic businesses including logging companies and other exporters are reporting disruption to their trade with China.
In China itself, the death toll is approaching 400, including the first outside of China, and the number of those infected exceeds 17,000.
"It's been an exciting day as far as headlines are concerned," said Mike Shirley, a dealer at Kiwibank.
The domestic currency had fallen as low as 64.52 US cents and "it's caught up in the global risk-off mood," Shirley said.
The People's Bank of China has been very supportive, injecting plenty of liquidity ahead of China's markets re-opening today after a 10-day break for the Lunar New Year holiday, but still the Shanghai Composite index opened down 8 per cent. "The question now is, is that enough to turn the tide. At what point does the market say, these are positive steps?"
Shirley said the market is plagued with uncertainty. "It's probably compounded by the fact that very few of those trading in the markets have a deep understanding of the spread of infection. You're really trading on the unknown.
"If it was economic or data, that's in the wheelhouse" but a virus of this nature isn't.
"We continue to watch and wait and worry."
Last week, the Reserve Bank of New Zealand said it was monitoring the coronavirus' impact and Australia's Reserve Bank is expected to comment on the situation tomorrow when it meets for the first time this year.
The RBA isn't expected to move its cash rate tomorrow but market pricing of the odds of another cut from 0.75 per cent currently to 0.5 per cent rose to 25 per cent today from 17 per cent on Friday.
The New Zealand dollar was at 96.53 Australian cents from 96.46 late Friday local time, at 49.11 British pence from 49.47, at 58.31 euro cents from 58.76, at 70.13 yen from 70.63 and at 4.5339 Chinese yuan from 4.4920.
The two-year swap rate had a bid price of 1.0620 per cent from 1.1054 on Friday while 10-year swaps were at 1.3700 per cent from 1.4175.
