FOREX-Safe-haven yen, Swiss franc slide for 2nd day as risk appetite grows

By Gertrude Chavez-Dreyfuss
·4 min read

* Risk appetite picks up; markets monitor coronavirus * Yen, Swiss franc drops * Offshore yuan, Australian dollar rise * Markets brace for more Chinese measures to ease virus impact * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh (Recasts, adds new comment, FX table, updates prices, changes byline, dateline; previous LONDON) By Gertrude Chavez-Dreyfuss NEW YORK, Feb 4 (Reuters) - The safe-haven yen and Swiss franc fell for a second straight session against the U.S. dollar on Tuesday, with risk appetite growing as investors were encouraged that the Chinese government was taking measures to contain the coronavirus and limit its economic fallout. Currencies such as the Australian dollar and offshore Chinese yuan climbed. The People's Bank of China (PBOC) has pumped in hundreds of billions of dollars into the financial system this week. In the past two days, the PBOC has injected 1.7 trillion yuan ($242.74 billion) through open market operations. "It feels like the containment measures and getting more information about the virus have helped the market and so investors are not so worried about uncertainty," said Thomas Anderson, managing director at moneycorp North America. "I think people overreacted last week and now they're unwinding that overreaction," he added. "China pretty much jumped into everything they needed to do to stabilize the market and it worked." Still, the death toll from the virus epidemic climbed to 427, infecting 20,438 in China. There have been nearly 200 cases elsewhere across 24 countries. Also, the outbreak is expected to have a devastating impact on first-quarter growth, policy sources said. In late morning trading, the dollar rose 0.5% against the yen to 109.26 yen, and gained 0.3% versus the Swiss franc to 0.9690 franc. Gains against the yen and franc helped push the dollar index higher to 97.922, up 0.1% on the day. In U.S. politics, Democratic Party officials blamed "inconsistencies" for an indefinite delay in Iowa's caucus results. A victory by left-leaning Bernie Sanders or Elizabeth Warren could hurt shares and boost safe-haven currencies. The euro, meanwhile, slipped 0.1% against the dollar to $1.1040. The Australian dollar rose 0.5% to US$0.67285, pulling away from a 10 1/2-year low of $0.6670 touched last October, after the Reserve Bank of Australia left its main cash rate unchanged at 0.75%. The offshore yuan rose against the dollar, which fell 0.3% to 6.9935. Elsewhere, sterling rebounded from a near-six week low against the U.S. dollar to trade 0.3% higher at $1.3028. Sterling has been under pressure from worries over a hard Brexit amid a tough stance https://www.reuters.com/article/uk-britain-eu/sovereignty-comes-first-britain-lays-out-tough-stance-for-eu-trade-talks-idUSKBN1ZW0I2 taken by Prime Minister Boris Johnson on European Union trade talks. ======================================================== Currency bid prices at 10:39 AM (1539 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1035 $1.1058 -0.21% -1.56% +1.1064 +1.1037 Dollar/Yen JPY= 109.3200 108.6700 +0.60% +0.42% +109.3500 +108.5600 Euro/Yen EURJPY= 120.66 120.19 +0.39% -1.07% +120.7100 +120.0700 Dollar/Swiss CHF= 0.9695 0.9657 +0.39% +0.19% +0.9699 +0.9657 Sterling/Dollar GBP= 1.3033 1.2993 +0.31% -1.70% +1.3046 +1.2942 Dollar/Canadian CAD= 1.3277 1.3284 -0.05% +2.24% +1.3301 +1.3266 Australian/Doll AUD= 0.6725 0.6691 +0.51% -4.22% +0.6734 +0.6680 ar Euro/Swiss EURCHF= 1.0701 1.0683 +0.17% -1.39% +1.0717 +1.0682 Euro/Sterling EURGBP= 0.8466 0.8509 -0.51% +0.14% +0.8537 +0.8468 NZ NZD= 0.6466 0.6460 +0.09% -4.01% +0.6476 +0.6450 Dollar/Dollar Dollar/Norway NOK= 9.2305 9.2793 -0.53% +5.15% +9.2871 +9.2177 Euro/Norway EURNOK= 10.1883 10.2660 -0.76% +3.56% +10.2738 +10.1790 Dollar/Sweden SEK= 9.6054 9.6479 -0.67% +2.76% +9.6550 +9.5944 Euro/Sweden EURSEK= 10.6011 10.6722 -0.67% +1.26% +10.6754 +10.5960 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Yoruk Bahceli in London; Editing by David Gregorio)