SINGAPORE: Trade-exposed Asian currencies edged ahead on Wednesday, buoyed by optimism that the spread of coronavirus had slowed, while the kiwi leapt after the central bank dropped its easing bias.

Across mainland China there were 2,015 new confirmed infections as of Tuesday, the lowest daily rise since Jan. 30. China’s senior medical adviser also said the outbreak might be over by April.

That news had currency markets stabilising after a steep selldown of China-exposed assets. The U.S. dollar, which had soaked up safe-haven flows as worries about the virus coincided with strong economic data, handed back some gains.

The Australian dollar, sensitive to China's fortunes because of Australia's commodity-driven export profile, firmed 0.3% to $0.6728 AUD=D3. China's yuan CNY= was modestly stronger and the safe-haven Japanese yen JPY= was a little softer.

“Two things are giving cause for optimism,” said Vishnu Varathan, head of economics at Mizuho Bank in Singapore. “The rate of infections is slowing and the number of recoveries is going up faster than deaths,” he said. “Markets have pulled back from the verge of the cliff...they’ve avoided a free fall.”

But levels have stabilised rather than recovered, pointing to plenty of caution remaining.

More than 1,100 people have died from the epidemic in China, about 2% of people infected. The economy has also been upended, with factory closures hitting supply chains from car makers to tech firms.

Oil prices, a barometer of global energy demand and so of growth, remain nearly a fifth lower than they were before the outbreak.

The currencies of oil exporters such as Canada and Norway have been hammered, with the krone NOK= shedding 5% this year and the loonie CAD=D3 hitting a four-month low on Monday.

Despite rising on Wednesday, the tourism-sensitive Thai baht THB= is down 4% for the year as is the Australian dollar, which briefly touched a decade-low this week.

Recession fears in Europe also dragged the euro EUR= to a four-month low overnight, though it has since recovered by about 0.2% to $1.0916. The pound GBP= sat at its highest in a week after fourth-quarter growth beat sluggish forecasts.

“The main impact of coronavirus for Europe is growth,” said Steve Englander, head of global G10 FX research at Standard Chartered.

“The euro area started the year with low growth and an ECB largely out of policy options...(a) bad scenario could see an extension of recent moves and EUR/USD may head towards the $1.04/05 lows of the European debt crisis.”

Elsewhere, the New Zealand dollar NZD=D3 jumped 0.8% to $0.6462, its sharpest rise in two months, after the central bank removed the chance of a rate cut from its forward projections. [NZD/]

It forecast a short hit from the coronavirus and predicted national growth would pick up in the second half.

“The easing bias is gone and we’re back to neutral,” said Westpac FX analyst Imre Speizer. “It’s the clearest indication that the easing cycle is probably over,” he said, unless a deep hit from the coronavirus prompts a change of heart.