Currencies across the Asia-Pacific region swept higher at the end of last year, boosted by the thaw in trade tensions between the US and China. Then the coronavirus outbreak hit, obliterating the gains.
After an almost 4 per cent rally in December, the Australian dollar stumbled last week to its weakest point in almost a decade. The currencies of Thailand and Singapore have also swooned after the central banks there flagged risks to their economies from disrupted supply chains and weakened Chinese tourism.
Christy Tan, Asia head of markets strategy and research at Melbourne-based banking group NAB, said “essentially everyone” had expected markets to stabilise and economic activity to improve after the US and China signed a trade war truce in December. Now, markets are pointing to sharply slower growth.