January 22, 2020 / 8:40 PM / in a month

FOREX-Dollar steady as coronavirus contagion fears abate

* Investors shake off China virus worries

* Sterling gains further as BoE rate-cut fears recede (Updates to U.S. afternoon trading)

By Saqib Iqbal Ahmed

NEW YORK, Jan 22 (Reuters) - The U.S. dollar was unchanged against a basket of currencies on Wednesday as safe-haven demand ebbed along with worries about whether the spread of a flu-like coronavirus would hurt the global economy.

The dollar index, which measures the greenback against six other major currencies, was flat at 97.534.

Deaths from China's new flu-like virus rose to 17, with more than 540 cases confirmed, leading the city at the center of the outbreak to close transport networks and urge citizens to stay home to limit the spread of the contagion.

China's response and candor, in contrast to how it handled the 2002-03 Severe Acute Respiratory Syndrome (SARS) epidemic, reassured investors concerned about possible global fallout.

"The virus concern is settling down a bit overnight as the market is getting a little more transparency around the issue from China and other nations than they did with SARS for example," Brad Bechtel, managing director, Jefferies in New York, said in a note.

Investors' demand for other safe-haven currencies was also muted. Against the Japanese yen and the Swiss franc, which tend to draw investors during times of geopolitical or financial stress, the dollar was little-changed.

"Doesn’t mean we are out of the woods on this issue just yet as I still expect a steady drone of negative headlines until we truly have everything contained but for now things have settled," he said.

The franc was pressured this week after data indicated the country's central bank had stepped up intervention to stop its currency from appreciating.

The Swiss National Bank, which has had an interventionist approach to the franc as it struggles to boost inflation in the export-oriented economy, declines to talk about its currency management policy. Investors use weekly sight deposit data as a proxy to estimate how active it has been in currency markets.

Data published on Monday showed an increase in the amount of cash that domestic commercial banks hold with the Swiss National Bank.

Among the majors, Britain's pound was the biggest mover, rising 0.65% against the dollar as investors debated whether the Bank of England would cut interest rates next week.

The Canadian dollar was down about 0.5% against the greenback after the Bank of Canada maintained its key overnight interest rate at 1.75% as expected, but opened the door to a possible cut should slow growth continue.

Reporting by Saqib Iqbal Ahmed; Editing by Bernadette Baum and David Gregorio

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