China SAFE: Impact from coronavirus epidemic on economy is temporary

China’s foreign exchange regulator, the State Administration of Foreign Exchange (SAFE), said in its latest statement release, the impact of a coronavirus outbreak on China’s economy would be temporary, per Reuters.

Key Quotes:

The country’s foreign exchange reserves — the world’s largest — rose $7.57 billion in January to $3.115 trillion.

External environment remains complex and severe, global financial markets face uncertainties.

Expects China’s fx reserves to remain overall stable.

China's long-term, sound economic fundamentals unchanged.

Sound economic fundamentals good for stable fx market operations.

Market Impact:

Despite the conciliatory tone seen in the statement, the risk sentiment deteriorates further in the European session, especially after Singapore’s government lifts the country-wide virus warning level to be on par with SARS epidemic after the rise in locally transmitted cases.

The Antipodeans slide nearly 0.60% to multi-month lows while USD/JPY revisits daily low at 109