February 4, 2020 / 8:24 PM / 17 days ago

FOREX-Safe-haven yen, Swiss franc skid for 2nd day after China's virus measures

    * Risk appetite picks up; markets monitor coronavirus
    * Yen, Swiss franc drops as risk appetite grows
    * Offshore yuan, Australian dollar rise
    * Markets brace for more Chinese measures to ease virus impact
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Adds new comment, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Feb 4 (Reuters) - The safe-haven yen and Swiss franc faltered for a second straight session
against the U.S. dollar on Tuesday, with risk appetite growing as investors were encouraged about the
Chinese government's measures to contain the coronavirus and limit its economic fallout.
    The yen posted its steepest daily fall versus the dollar in nearly six months, while the Swiss franc
had its largest daily percentage loss in more than a month.
    The Japanese currency and Swiss franc tend to benefit in times of global tension, but they typically
struggle when risk sentiment improves.
    In contrast, commodity-linked currencies such as the Australian and New Zealand dollars along with the
offshore Chinese yuan rose, even as the virus remained a threat.
    The People's Bank of China (PBOC) has pumped hundreds of billions of dollars into the financial system
this week to cushion the potentially adverse economic impact. In the past two days, the PBOC has injected
1.7 trillion yuan ($242.74 billion) through open market operations.
    "There was a bit of optimism about the PBoC's injections into the market," said Mazen Issa, senior FX
strategist, at TD Securities in New York.
    "It's a strong signal that China is willing to support financial markets in that regard to limit the
virus contagion.     But this is very short term and doesn't do anything about the supply chain
disruptions," he added. 
    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 afternoon trading, the dollar rose 0.8% against the yen to 109.51 yen, and gained 0.4%
versus the Swiss franc to 0.9690 franc.
    Gains against the yen and franc helped push the dollar index higher to 97.952, up 0.2% on the
day.
    In U.S. politics, Democratic Party officials blamed "inconsistencies" for a 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 0.2% against the dollar to $1.1040.
    The Australian dollar rose 0.6% to US$0.6735, 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 0.4% higher at
$1.3038. Sterling has been under pressure from worries over a hard Brexit amid a tough stance here
 taken by Prime Minister Boris Johnson on European Union trade talks.
    
    ========================================================
    Currency bid prices at 3:09 PM (2009 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1042        $1.1058     -0.14%         -1.50%      +1.1064     +1.1034
 Dollar/Yen       JPY=        109.5000       108.6700    +0.76%         +0.59%      +109.5300   +108.5600
 Euro/Yen         EURJPY=     120.92         120.19      +0.61%         -0.84%      +120.9600   +120.0700
 Dollar/Swiss     CHF=        0.9693         0.9657      +0.37%         +0.16%      +0.9704     +0.9657
 Sterling/Dollar  GBP=        1.3035         1.2993      +0.32%         -1.69%      +1.3046     +1.2942
 Dollar/Canadian  CAD=        1.3280         1.3284      -0.03%         +2.26%      +1.3301     +1.3263
 Australian/Doll  AUD=        0.6735         0.6691      +0.66%         -4.07%      +0.6739     +0.6680
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0705         1.0683      +0.21%         -1.35%      +1.0717     +1.0682
 Euro/Sterling    EURGBP=     0.8468         0.8509      -0.48%         +0.17%      +0.8537     +0.8465
 NZ               NZD=        0.6483         0.6460      +0.36%         -3.76%      +0.6489     +0.6450
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.2152         9.2793      -0.69%         +4.97%      +9.2871     +9.2018
 Euro/Norway      EURNOK=     10.1759        10.2660     -0.88%         +3.44%      +10.2738    +10.1605
 Dollar/Sweden    SEK=        9.5922         9.6479      -0.75%         +2.62%      +9.6550     +9.5908
 Euro/Sweden      EURSEK=     10.5923        10.6722     -0.75%         +1.18%      +10.6754    +10.5910
 
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by David Gregorio and Sonya Hepinstall)
  
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