FOREX-Dollar boosted by robust U.S. private payrolls, news of virus treatment

By Gertrude Chavez-Dreyfuss

* Talk of possible virus treatment sparks risk asset rally * Death toll from coronavirus rises to 490 * U.S. private payrolls rise more than expected in January * U.S. services sector activity picks up in January * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh (Adds Hong Kong dollar hitting nearly four-year high vs the U.S. dollar, Trump's impeachment acquittal; updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, Feb 5 (Reuters) - The dollar gained against the safe-haven Japanese yen and Swiss franc on Wednesday, as risk appetite rose on reports of a possible treatment for the new coronavirus out of China, which has caused major disruptions in the global economy and businesses around the world The U.S. currency also benefited from a strong private-sector payrolls report for January, suggesting the world's largest economy was on a stable growth path. The focus, though, remained on the coronavirus, with the yen and Swiss franc falling after news reports said a Chinese university had found a drug to treat infected people, and researchers in Britain had made a "significant breakthrough" in finding a vaccine. Traders used the headlines to load up on risky assets. "There is some optimism about having potentially a way to treat the symptoms from having the coronavirus," said Erik Nelson, currency strategist at Wells Fargo Securities in New York. The World Health Organization, however, played down the reports of "breakthrough" drugs being discovered, saying that there are "no known effective therapeutics." The virus so far has claimed 490 lives, most in and around the locked-down central Chinese city of Wuhan, where it emerged late last year. There have been two deaths in the Philippines and Hong Kong, both following visits to Wuhan. Investors overall were heartened as China's central bank injected substantial liquidity into the financial system to cushion the economic fallout from the virus. "The response we're seeing from Chinese authorities is not surprising," said Erik Bregar, head of FX strategy at Exchange Bank of Canada in Toronto. "They're doing everything they can to shore up investor confidence, and frankly we expect more of this kind of reporting." Risk sentiment also improved after the ADP National Employment Report showed that U.S. private-sector payrolls increased by 291,000 in January, far above expectations for an increase of 156,000 jobs. January's job gains were the largest since May 2015. In addition, U.S. services sector activity picked up last month, with industries reporting increases in new orders. The Institute for Supply Management's non-manufacturing index rose to 55.5 last month, the highest since August. In afternoon trading, the dollar rose 0.3% against the yen to 109.83 yen, after earlier hitting a two-week high of 109.84 yen. Against the Swiss franc it rose 0.5%, to 0.9738 franc. The dollar held gains after President Donald Trump was acquitted late Wednesday in his U.S. Senate impeachment trial. The Senate voted 52-48 to acquit him of abuse of power stemming from his request that Ukraine investigate political rival Joe Biden, a contender for the Democratic nomination to face Trump in the Nov. 3 election. The Australian dollar, a barometer of risk appetite toward China given Australia's close economic ties with Beijing, was also well-bid, up 0.2% versus the dollar at US$0.6754. The Chinese currency in the offshore market also rebounded 0.2% against the dollar, which fell to 6.9751 yuan. The Hong Kong dollar rose sharply as well, hitting its highest level since March 2017 against the U.S. dollar, which was last down at HK$7.7619. ======================================================== Currency bid prices at 4:45 PM (2145 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.0997 $1.1042 -0.41% -1.90% +1.1047 +1.0994 Dollar/Yen JPY= 109.8300 109.5100 +0.29% +0.89% +109.8400 +109.3100 Euro/Yen EURJPY= 120.79 120.96 -0.14% -0.95% +121.1400 +120.6600 Dollar/Swiss CHF= 0.9738 0.9690 +0.50% +0.62% +0.9747 +0.9679 Sterling/Dollar GBP= 1.2997 1.3029 -0.25% -1.98% +1.3069 +1.2958 Dollar/Canadian CAD= 1.3282 1.3272 +0.08% +2.28% +1.3302 +1.3262 Australian/Doll AUD= 0.6746 0.6737 +0.13% -3.92% +0.6774 +0.6725 ar Euro/Swiss EURCHF= 1.0709 1.0702 +0.07% -1.32% +1.0728 +1.0691 Euro/Sterling EURGBP= 0.8460 0.8474 -0.17% +0.07% +0.8490 +0.8435 NZ NZD= 0.6474 0.6488 -0.22% -3.89% +0.6502 +0.6470 Dollar/Dollar Dollar/Norway NOK= 9.2144 9.2095 +0.05% +4.97% +9.2493 +9.1769 Euro/Norway EURNOK= 10.1345 10.1701 -0.35% +3.01% +10.2147 +10.1120 Dollar/Sweden SEK= 9.5819 9.5883 -0.48% +2.51% +9.6011 +9.5516 Euro/Sweden EURSEK= 10.5397 10.5902 -0.48% +0.67% +10.5985 +10.5280 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Richard Chang and Leslie Adler)