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FOREX-Dollar resumes decline; sterling rebounds after BoE rate cut

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 The U.S. dollar resumed its descent against the Japanese yen and Swiss franc on Wednesday as fears over the spreading coronavirus pushed investors into safe havens, while the British pound recovered after Bank of England unexpectedly cut interest rates.

Central banks and governments around the world are scrambling to limit the economic damage of the coronavirus outbreak, which has sent stock markets into a tailspin as investors head for the safety of government bonds.

Sterling initially fell as much as 0.4% against the dollar and 1.2% against the euro after the BoE's cut its benchmark rate by 50 basis points, to 0.25%. the pound rebounded as the move - including actions to support bank borrowing - reassured some investors. The pound rose to $1.2955 GBP=D3 , up 0.6% on the day.

Against the euro, the pound was last up 0.1% at 87.38 pence per euro. EURGBP=D3

Britain's finance minister, Rishi Sunak, is expected to direct further firepower at the British economy in his first budget later on Wednesday, expected at 1230 GMT.

The dollar was down particularly sharply against the safe-haven Japanese yen and Swiss franc. It lost 0.5% to 105.11 yen JPY= after earlier falling more than a full yen from Tuesday's high of 105.915.

The U.S. currency had fallen as low as 101.18 on Monday. While Japan may already be in recession, its currency usually rises at times of market stress because of the country's current account surplus and its net creditor status.

The Swiss franc gained 0.4% to 0.93595 franc per dollar CHF= . The euro also rose 0.4% to $1.13175 EUR= .

The dollar had jumped on Tuesday as investors hoped global monetary policymakers would offer further stimulus to offset trade and travel disruptions. But lack of clarity on what Washington will do has kept many investors on guard.

U.S. President Donald Trump said on Tuesday he would ask Congress for a payroll tax cut and other "very major" stimulus moves, but the details remain unclear. is too early to say the market sentiment has turned positive. Yesterday's rebound in the dollar and in risk assets is a type of a rebound you often see in a downtrend," said Shinji Ishimaru, senior currency analyst at MUFG Bank.

"In addition to economic measures, the focus will be on how much the U.S. can contain the infections to keep the economy going. That is a very big unknown," he said.

Money markets are fully pricing in a further 10-basis-point cut by the European Central Bank when it meets on Thursday. =ECBWATCH

The BoE rate cut follows similar moves by U.S. and Canadian central banks and put more pressure on the ECB to act, although it has limited room with rates already negative.

"The pound sold off initially on the aggressive move but the statement shows that their (BoE) action is co-ordinated with the Treasury and the measures include a package for lending," Jane Foley, senior currency strategist at Rabobank, said.

"Altogether the statement suggests lots of co-ordination. This is reassuring and should help limit the impact on the economy and that could also help support the pound."


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EM ASIA FX-Trade in a range as doubts persist over coronavirus response measures

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Indonesia's rupiah fell on Wednesday after the country reported its first coronavirus-related death, while other Asian currencies traded in a thin range due to the uncertainty over proposed government measures to limit the economic impact of the epidemic.

The market has been hoping for concrete details of U.S. President Donald Trump's promise for "very major" stimulus moves, but the lack of an announcement has left investors hanging. could set the direction of risk appetite, and thus Asian currencies, in the short-term. Markets are trading day by day, assessing the severity and spread of COVID-19 globally," said Chang Wei Liang, an FX strategist at Mizuho Bank.

The dollar fell more than 1% against the safe-haven yen JPY= FRX/ .

In Indonesia, the central bank governor said the outlook for economic growth this year could be lowered when it holds its policy meeting next week. rupiah IDR=ID dropped 0.3% after the country confirmed its first death due to the virus.

The government had also pledged fiscal support to help stimulate the economy, but economists questioned how much additional spending could be provided, given weak revenue collection so far this year. is imperative that policy-makers collaborate to roll out coordinated measures that are emphatic; leaving no doubts about the constructive solidarity of the global response," Mizuho bank analysts said in a client note.

Financial markets took a pounding on Monday after Saudi Arabia and Russia's price war triggered an oil price crash and deepened the gash caused by the coronavirus epidemic to the global economy.

Elsewhere, the South Korean won KRW=KFTC was little changed against the dollar. The country reported a jump in cases on Wednesday, compared with a day earlier where it saw a decline in the rate of new infections. Philippine peso PHP= and Thai baht THB=TH also fell.

The Indian rupee INR=IN , emerging from a holiday on Tuesday, advanced 0.4% after losing close to 1% over the last three days. The Singapore dollar SGD= and Chinese yuan CNY=CFXS also gained.

The ringgit MYR=MY gained 0.3%. The country's newly appointed prime minister said his cabinet will form an economic action council to tackle serious issues affecting the country's economy such as the drop in global oil prices and the outbreak. VS U.S. DOLLAR AS AT 0635 GMT

Currency

Latest bid Previous day Pct Move Japan yen

104.500

105.63

+1.08 Sing dlr

1.389

1.3914

+0.17 Taiwan dlr

30.068

30.036

-0.11 Korean won

1193.000

1193.2

+0.02 Baht

31.510

31.49

-0.06 Peso

50.523

50.45

-0.14 Rupiah

14380.000 14340

-0.28 Rupee

73.800

74.11

+0.42 Ringgit

4.230

4.242

+0.28 Yuan

6.946

6.9558

+0.14

Change so far in 2020

Currency

Latest bid End 2019

Pct Move Japan yen

104.500

108.61

+3.93 Sing dlr

1.389

1.3444

-3.22 Taiwan dlr

30.068

30.106

+0.13 Korean won

1193.000

1156.40

-3.07 Baht

31.510

29.91

-5.08 Peso

50.523

50.65

+0.25 Rupiah

14380.000 13880

-3.48 Rupee

73.800

71.38

-3.28 Ringgit

4.230

4.0890

-3.33 Yuan

6.946

6.9632

+0.25



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EM ASIA FX-Currencies weaken as oil price crash dampens risk sentiment

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Oil prices plunge about 30%

* Malaysian ringgit drops to mark worst day in two-weeks

Yuan expected to outperform the basket in 2020 - HSBC analyst (Adds text, updates prices)

By Anushka Trivedi

March 9 (Reuters) - Asian currencies weakened on Monday as investors sold off risky assets after a plunge in oil prices exacerbated concerns over economic fallout stemming from the coronavirus epidemic.

Saudi Arabia's decision to slash average selling prices and ramp up crude production after Russia backed away from making output cuts sent shockwaves through the markets and is likely to weigh on regional currencies, since the majority of them are net oil importers. O/R

Meanwhile, the number of coronavirus cases globally surged past 107,000 as the outbreak spread to more countries. Italy took drastic measures and sealed off large parts of the prosperous north of the country, including financial capital Milan. investors sought safer bets and pushed the Japanese yen JPY= up 3% against the dollar to a three-year high and the euro EUR= to a two-year peak. FRX/

U.S. 30-year treasury yields US30YT=RR sank below 1% and 10-year yields US10YT=RR under 0.5%, eroding the dollar's chief attraction as the markets upped their bets for further rate cuts by the Federal Reserve to mitigate the economic damage.

The Fed's move is expected to spill over to Asia, with Morgan Stanley (NYSE:MS) analysts expecting that "the majority of emerging market central banks will also cut rates further, taking global monetary policy rates to a new all-time low."

Malaysia, and oil importing nation Indonesia, saw their currencies lose nearly 1% against the dollar, while their respective stock markets also hit multi-year lows. .SO

The rupiah IDR= was on track to slide for a third straight session and Indonesia's 10-year government bond yield ID10YT=RR rose slightly. Malaysian ringgit MYR= dropped 0.9% and was on its way to mark a worst session in two-weeks. The country's new prime minister is due to announce his new cabinet later on Monday, a week after he was appointed amid a political tussle. South Korean won KRW=KFTC weakened as much as 1.3% to 1,207.20 against the dollar, prompting its finance ministry to issue a verbal warning against disorderly currency market movement. the world's third-biggest oil importer, saw its currency INR=IN decline 0.3%, while the Singapore dollar SGD= gave up about 0.5%.

The Chinese yuan CNY=CFXS pared early gains to trade 0.1% lower after reporting a larger than expected plunge in exports over the weekend. analysts at HSBC see the yuan benefiting from a dip in oil prices as nearly a quarter of its imports are commodity-related.

China's monetary policy will be closely watched, which has so far lagged the Fed's, and resulted in a record yield differential that is likely to support foreign inflows to its bond market, HSBC added.

"We believe the yuan will outperform the basket this year."

CURRENCIES VS U.S. DOLLAR AS AT 0518 GMT Currency

Latest bid Previous day Pct

Move Japan yen

102.560

105.3

+2.67 Sing dlr

1.385

1.3781

-0.46 Taiwan dlr

30.077

30.040

-0.12 Korean won

1205.300

1192.3

-1.08 Baht

31.530

31.41

-0.38 Peso

50.625

50.54

-0.17 Rupiah

14350.000 14220

-0.91 Rupee

73.975

73.73

-0.34 Ringgit

4.208

-0.90 Yuan

6.943

6.9342

-0.12

Change so far in 2020

Currency

Latest bid End 2019

Move Japan yen

102.560

108.61

+5.90 Sing dlr

1.385

1.3444

-2.90 Taiwan dlr

30.077

30.106

+0.10 Korean won

1205.300

1156.40

-4.06 Baht

31.530

29.91

-5.14 Peso

50.625

50.65

+0.05 Rupiah

14350.000 13880

-3.28 Rupee

73.975

71.38

-3.51 Ringgit

4.208

4.0890

-2.83 Yuan

6.943

6.9632

+0.29


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FOREX-Yen and euro soar as investors stampede to safety amid coronavirus worries

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The safe-haven yen soared, the euro jumped after U.S. treasury yields dropped and export sensitive currencies fell to multi-year lows on Monday as coronavirus fears routed global markets.

The yen JPY= jumped more than 3% to a day high of 101.69 per dollar, its highest in three years and the sharpest daily jump since mid-2016.

The euro EUR= rose more than 1.4% to an almost two-year peak of $1.1452. The Australian AUD=D3 and New Zealand NZD=D3 dollars both lost more than 2%, with the Aussie hitting a fresh 11-year low.

Against the yen, the Aussie AUDJPY= and Kiwi NZDJPY= lost more than 5%.

"It is totally wild," said Shafali Sachdev, head of FX Asia at BNP Paribas (PA:BNPP) Wealth Management in Singapore. "Stops are being triggered at every level," she said.

"This is not a train I want to be getting in front of, and how long it continues and where it goes from here is going to depend on how the situation evolves," she added, saying further stockmarket falls could drive even bigger moves in funding currencies.

The number of people infected with the coronavirus has topped 107,000 across the world as the outbreak reached more countries and caused more economic disruption. panic was exacerbated by a collapse in oil prices, which dropped more than 20% after the world's top exporter, Saudi Arabia, vowed to cut prices and raise its production significantly. O/R

The yield on 10-year U.S. Treasuries US10YT=RR went under 0.5% for the first time, amid a rush for the safety of bonds.

That undermines the dollar by all but sinking one of the most popular carry trades globally - borrowing at negative rates in euro or yen to buy U.S. assets.

The yen's jump drew concern in Japan, with a senior finance official telling reporters that authorities were closely watching trade. the oil price fall made for withering drops in oil exporters' currencies.

The Mexican peso MXN= fell as far as 6% against the dollar. The Canadian dollar CAD=D3 fell more than 2% to 1.3690 per dollar, its lowest since 2017.

The Norwegian krone NOK=D3 shed 3% to hit a  record trough and the Russian rouble RUB= plunged by 5% to its lowest in nearly four years.


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FOREX-Dollar and commodity currencies trampled by oil, virus double shock

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Coronavirus outbreak: "What happens to my degree?" ask Indian students in affected nations

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Pradeep Rao (name changed) knows he is lucky. The second-year MBBS student at Hebei University in China was among the Indian students who returned home in January after the impact of the deadly coronavirus outbreak became public.

But now a month later, Rao is again worried. He doesn't know when he can go back to the university and complete his degree. With every passing day, he fears about a delay.  While he is back home in Vijaywada, there is no clarity on when he would be able to resume classes at the university.

"There was a holiday for the Chinese New Year which has now been extended. I did receive a message from the university that 'we will meet soon'. However, when is the question,” says Rao over the phone from his hometown Vijaywada.

While several Indian students from China are in India since they were on a new year break, a few were left back since they were either finishing a course or had internships.

Since then the outbreak seems to have slowed down in China, and is now spreading fast in countries such as Italy, Iran, South Korea and Japan, for students there is little respite.

Considering that March/April is when one semester ends and students break for the summers, suspension of classes across affected regions is a matter of concern.

What happens to students in China?

As far as China is concerned, several Indian students are part of the quarantine facility in China. Those students who have returned to India are unclear about when the academic session will start. But the situation is not as grim as it looks.

Universities are fast catching on to the online education system to ensure that classes are continued, at least partially.

Rao told Moneycontrol that his university started offering online classes for certain modules from March 2 onwards.

Medical courses are the most popular in China. Almost 85 percent of the Indian students studying in China are enrolled into MBBS and allied programmes.

The most popular institutes in China among Indians are Hebei University, Shihezi University, Shanghai University and Qingdao University.

Classes have been suspended across universities in China till further notice from the government. A direct impact would be that the academic calendar would get stretched.

This is because for courses like MBBS, large portion of the course programme involves practical training. This cannot be replaced by distance education. Overseas education firms are of the view that semester-end breaks would also be cancelled or cut short to make up for lost time.

Moneycontrol sent an email to all the institutes mentioned above seeking clarity on the academic situation, but did not receive any response.

Adarsh Khandelwal, co-founder of Study Abroad consulting firm said that China has responded admirably to the coronavirus outbreak and attempted to contain the casualties and infections in every possible manner.

“The overseas students studying at universities have been sent home. Thereby, students presently studying there have been affected with a likely extension in the duration of completion of their study programs. Universities are exploring options to strengthen qualitative online teaching in an attempt to fulfill their commitment to the students,” he added.

Sarvanan Krishnan, another Indian student from Tamil Nadu studying microbiology in Hong Kong said that there is no communication from either the government or the institutes on who are the persons affected and for how long classes will be suspended.

"We interact with everyone from the librarian to the canteen supervisor to the head professor. Shouldn't there be clarity on if there any suspected carriers of the virus. Also, why not give a tentative deadline to help us understand when classes will resume," he added.

His college friend Avantika Bansal was lucky. She was part of an exchange-programme of a Singapore-based institute, in China and Italy. However, this was immediately cancelled when COVID-19 started to spread and Bansal was able to leave on time. This module that was missed due to cancellation of the exchange programme could be taken in some other country.

How will this impact China as an education destination?

Khandelwal said that China is a highly preferred and acclaimed education hub for international students. There will be an impact on the foreign student inflow into China ahead of the peak season of March/April when students typically choose their study destination abroad.

“The coronavirus outbreak is likely to have a deterrent effect, especially since the choice of destination for studying overseas is strongly impacted by concerns regarding safety of the students,” explained Khandelwal/

Among those who have applied, there seems to be some uncertainty. A Mumbai-based education consultant said that there are parents who want to withdraw applications sent to Chinese universities.

“We have asked individuals to wait till April before taking a decision to withdraw applications made for studying in China,” he added.

What about other countries?

Among the affected regions of COVID-19, Italy is another popular education destination for students. An estimated 4,500 Indians are studying across various programmes in Italy with programmes like design, architecture and fine arts among the most common fields of study.

Srividya Shankar who is pursuing an architecture course from a leading institute in Pavia, Italy received news that classes have been suspended due to a possible infection in the region.

However, she is now in a fix as Shankar is not sure whether to return to her hometown Chennai or stay back.

“We don’t know how long the suspension of lectures would continue. Flights to India from here (one-way) are upwards of Rs 28,000. I am not too sure what to do,” she said.

Other institutes like Sapienza University of Rome has suspended classes for one particular course. This was after a student’s father tested positive.

In an emailed response to Moneycontrol, the university said that it is implementing the protective measures issued by the Italian Health Authorities against the COVID-19. To date, it said that the competent authorities have not suspended services and educational activities.

However from March 2, 2020, until further notice from competent authorities, Regione Lazio Health Department has suspended, as a precautionary measure, all the lectures/lessons of the Informatics Bachelors Programme (year one).

“One of the students enrolled in the course belongs to the family who is currently under observation at the Spallanzani Hospital in Rome. The educational activities will continue at a later time following specific procedures that will be communicated to the students. The course’s lecture room has been already sanitized,” said the university in a response.

Exchange programmes are either being deferred or cancelled. The National University of Singapore, Nanyang Technological University (NTU) and the Singapore Management University (SMU) have suspended student exchanges to universities in Italy, due to the rise in COVID-19 cases there.

Since the COVID-19 outbreak comes right ahead of the new academic year, a drastic change is expected in the way study destinations are chosen. COVID-19 nations are expected to fall out of the top 10 list of preferred countries.

Among other countries, Japan, Iran and South Korea are popular destinations for student exchange programmes of South-East and European institutes. Due to the outbreak of the disease, these programmes have been deferred since this is considered 'non-essential travel'.

Coronavirus outbreak | Global insurers to be hit by claims, financial market volatilities: Moody’s

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Bad times are in store for the insurance sector as more nations fall prey to the coronavirus or COVID-19 outbreak. Rating agency Moody’s sees a direct impact on global insurance companies due to a rise in claims and an indirect whiplash due to financial market fluctuations.

India's General Insurance Corporation of India (GIC) has an exposure to the global reinsurance market. So, any major impact on the reinsurance and insurance market globally will affect GIC Re's books.

“We currently expect these indirect effects to have a more material financial impact on the sector. Mortality levels would need to rise significantly to trigger a substantial rise in claims for life insurers. We foresee no significant impact from claims on mainstream non-life players,” Moody's said in a recent report.

Second order effects to cause greatest financial impact

The Coronavirus outbreak may trigger an economic slowdown and those fears are making financial markets increasingly volatile. Moody's sees an increasing likelihood of a global recession as long as the virus remains uncontained.

"Significant deterioration in equity markets and widening credit spreads, along with even lower interest rates, will weigh on insurers' profitability, capitalisation and business volumes," it stated.

Fears of additional cases being detected has been weighing on Indian financial markets. Benchmark indices ended in the red for the seventh consecutive session on March 2 as concerns over coronavirus continued to weigh on investor sentiment.

D-Street witnessed one of the most volatile sessions in the recent past on March 2, a swing of around 1,000-points, that wiped out most gains made on the Sensex.

Global reinsurers' pandemic exposure is significant at very high severity levels

Global reinsurers have benefited from a significant growth in China and the rest of Asia. However, the Moody’s report said their exposure to the region is still moderate relative to their overall portfolios. It foresees little impact on the reinsurance space given the "absence of significant international spread of the coronavirus and high mortality."

P&C commercial lines exposure is limited

Moody’s does not expect a significant rise in claims for commercial line insurers, although some sub-sectors, such as contingency business, may be affected. "Business interruption claims will be limited as these policies commonly exclude outbreaks of infectious disease, and pay only if physical damage occurs." it explained.

Trade credit insurers face rising claims due to economic slowdown
A slower consumer spending and negative pressure on China's goods and services sectors will likely lead to higher credit insurance claims. Moody’s expects a greater impact on these insurers' capitalisation and profitability in the event of a significant global economic slowdown. When it comes to India, it lists sectors like electronic goods, pharmaceuticals and automobile that have been hit due to a near shutdown of goods and component supply from China since January.

Explained: Post-Brexit, here's how getting a UK work visa will change

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Are you an Indian holding a Phd in a STEM (science, technology, engineering and mathematics) discipline? If so, getting a United Kingdom visa could become easier for you starting next year. That is because, even if your salary is below the minimum threshold set by the UK government in a proposed new regime, there are a few concessions.

These concessions will make you eligible for immigration under new rules that will kick-in from January 1, 2021.

This is one of the many new regulations that the UK government has proposed in its attempt to attract talent after exiting the European Union (EU) on January 31, 2020. Following this, a new set of rules will come into place which would end free movement of people.

The UK government will introduce an Immigration Bill to bring in a firm and fair points-based system to attract high-skilled workers.

Until now, migrants including those from India, were employed in high-skilled jobs like the ones in the IT sector and low-skilled jobs like those in construction, fast-food chains and grocery stores. The UK government's attempt is to mandate employers to hire locally for low-skilled jobs.

The total number of work visas granted (tier two) touched an all-time high of 1.1 lakh in 2019. Of these, over half were granted to Indians.

At 57,199, India was the top source for tier two or skilled work visas given to migrants in 2019. This was a 3 percent increase over 2018.

In February, the UK government said it is taking a phased approach to ensure smooth delivery of this new system and to allow sufficient time for everyone to adapt.

The new system

Taking guidance from the Migration Advisory Committee (MAC) report published in January, a minimum of 70 points will be required to be eligible to live and work in the UK.

MAC has recommended a reduction in the general salary threshold from £30,000 to £25,600. This means, even if you are paid a minimum of £25,600, you will be eligible for the relevant points.

The points-based system will provide simple, effective and flexible arrangements for skilled workers from around the world to come to the UK through an employer-led system.

Earlier, employers could decide who would be eligible to migrate depending on skill requirements. However, the UK government has said that they are taking back this power to decide on offering work visas to migrants.

In the new system, all applicants, both EU and non-EU citizens, will need to demonstrate that they have a job offer from an approved sponsor, that the job offer is at the required skill level and that they speak English.

A minimum B1 level of English would be necessary. In simple terms, a migrant should be able to effectively communicate in English including work-related matters, describing situations and writing simple and coherent text.

The B1 level also indicates that an individual will be able to 'cope' with most of the situations that would arise from work-related trips in the region, including conversing with strangers, asking for directions and addressing a meeting, among others.

In addition to this, if the applicant earns more than the minimum salary threshold, then the individual would be eligible to make an application. However, if they earn less than the required minimum salary threshold (not less than £20,480), the applicant will be eligible if they are highly skilled or have a relevant PhD for the job.

Each category has a set points system. For instance, while a salary of £25,600 or above would entitle a candidate to 20 points, job in a shortage occupation will be equivalent to 20 points. Speaking English is mandatory and would be equal to 10 points.

How will this work?

For example, a university researcher in a STEM subject wishing to come to the UK on a salary of £22,000, (which is below the general minimum salary threshold), he or she may still be able to enter if they have a relevant PhD in a STEM subject.

Likewise, a nurse wishing to come to the UK on a salary of £22,000 would still be able to enter the UK on the basis that the individual would be working in a shortage occupation, provided it continues to be designated in shortage by the MAC.

A list of the stills in shortage will be published by MAC. It is likely that professions like nurse, coder, data mining and technology-linked engineering will be high in demand due to shortage of local talent.

Some points could be tradable. The UK government has said that migrants will still be awarded points for holding a relevant PhD or if the occupation is in shortage, which they will be able to trade against a salary lower than the ‘going rate’ or the minimum threshold.

A STEM PhD would mean that a candidate could be eligible even if they are paid 20 percent lower than the minimum requirement.

The UK Home Office will continue to refine the system and may also include attributes that can be ‘traded’ against a lower salary. For example, this might include a greater range of qualification levels or other factors such as age or experience studying in the UK.

The MAC report said that about 70 percent of European Economic Area (EEA) resident citizens arriving in the UK since 2004 would be found ineligible for either a skilled-work, family or tier four visa.

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