Coronavirus has now spread to around 50 countries and global equity markets continue to be hard hit on global growth concerns.
"Equities fell, the greenback slid to the south as markets got a bit aggressive in their pricing in of a monetary policy response from their central banks," said Kiwibank FX trader Mike Shirley. The latest move came when the Center for Disease Control and Prevention in the United States reported a new case of covid-19 in California that had no obvious links to China, suggesting the virus may be spreading in the US.
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Markets now see a chance that the US Federal Reserve could cut rates as early as next month.
On Wall Street, the S&P 500 was down 1.8 per cent at 8am in Wellington, the Dow Jones Industrial Average was down 1.9 per cent and the Nasdaq was down 2.5 per cent.
Meanwhile, Tokyo has halted big gatherings and sports events for two weeks, and is closing schools early for the spring break, although it still plans to go ahead with the 2020 Olympics, Reuters reported. There are currently 189 cases in Japan according to Johns Hopkins virus tracker.
New cases in South Korea took its total to 1,261 with 12 deaths, while Europe's hotspot, Italy, had 453 infections and 12 deaths, and Iran reported 245 cases and 26 fatalities, Reuters said.
ASX futures were down around 100 points to 6,516. Domestically, however, investors will also be watching for more company earnings reports, in particular any commentary around the impact of the virus.
Port of Tauranga is due to report along with Tourism Holdings. Yesterday, the S&P/NZX 50 Index declined or 0.8 per cent.
The kiwi dollar, meanwhile, benefited from the weaker greenback and was trading at 63.19 US cents at 8am in Wellington from 62.90 at 5pm yesterday.
"The 'deeper' exploratory move lower that we expected following the break of 0.63 has not eventuated, but we do see the risks skewed to the downside given worsening news in relation to COVID-19," said ANZ Bank New Zealand chief economist Sharon Zollner.
"Markets here expect an OCR cut by August; that's weighing on New Zealand dollar."
- BusinessDesk