March 9, 2020 / 6:45 PM / 19 days ago

FOREX-Yen, Swiss franc advance as risk appetite worsens on oil, coronavirus

    * Yen soars to three-year high with 3% jump
    * Euro leaps more than 1% as U.S. yields crater
    * FX volatility surges as carry trades unwound
    * Oil-exposed currencies plunge
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Adds new comment, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, March 9 (Reuters) - The safe-haven yen and Swiss franc surged on Monday, as risk appetite
plummeted after a 30% crash in oil prices and tumbling stock markets panicked investors and sent currency
prices swinging wildly.
    The U.S. dollar, however, strengthened against the emerging market currencies.
    Investors were also alarmed after U.S. Treasury yields declined to record lows, with the benchmark
10-year yield falling below 40 basis points and the entire yield curve below 1% for the first
time ever.
    At the same time, oil prices fell 25% after Saudi Arabia pledged to slash prices and boost production
following the collapse of an OPEC supply agreement.
    That further increased nervousness in the market already rattled by weeks of wild moves, as investors
struggled to assess the economic damage caused by the coronavirus.
    "The dollar will strengthen against Asia and will crush the EM countries, but the Europeans will be
much stronger than the U.S. dollar as the Germans and the Swiss will attract funds while the Fed is out
rescuing the world with unlimited repos - underwriting crisis funds for the 'Eurodollar market' wherever
the hell that is," said John Taylor, president and founder of research firm Taylor Global Vision in New
York. 
    The Federal Reserve on Monday increased daily cash injections to the banking system to ensure an ample
supply of bank reserves.
    On the coronavirus front, the number of people infected with the virus topped 110,000 across the world
as the outbreak reached more countries and caused more economic damage.
    As a result, currency volatility shot up.
    A gauge of volatility in the euro/dollar market - the world's most-traded currency pair - shot to its
highest since April 2017 as the euro surged more than 1% to its strongest since January 2019.
    Dollar-yen one-month implied volatility surged to an 11-year high at more than 18% as the
dollar slid to its weakest since 2016.
    In afternoon trading, the dollar fell as low as 101.20, its lowest in more than three years. It
was last down nearly 3% at 102.23 yen. 
    The yen posted its largest three-day gain since the 2008 financial crisis. It was up around 9% in a
dozen trading days.
    The euro rallied 1.4% to $1.1443 after earlier touching $1.1492, the highest since late January
last year.  
    The dollar index dropped to its weakest since September 2018, and was last at 94.913, down 0.5%
.
    The dollar also dropped 1.3% against the Swiss franc to 0.9280.
    There were also big moves in currencies linked to oil prices.
    Norway's crown tumbled to record lows. The euro added 4% against the crown to 10.857 and
the dollar gained 3.1% to 9.535 crowns.
    The Canadian dollar shed 1.5% against the greenback, which was up at C$1.3620. 
    The Australian and New Zealand dollars earlier fell nearly 2% before bouncing back.
    
    ========================================================
    Currency bid prices at 2:36PM (1836 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1457        $1.1285     +1.52%         +2.19%      +1.1492     +1.1286
 Dollar/Yen       JPY=        102.1500       105.3000    -2.99%         -6.16%      +104.9100   +101.2000
 Euro/Yen         EURJPY=     117.02         118.90      -1.58%         -4.04%      +118.6500   +116.1400
 Dollar/Swiss     CHF=        0.9248         0.9372      -1.32%         -4.44%      +0.9375     +0.9194
 Sterling/Dollar  GBP=        1.3114         1.3047      +0.51%         -1.11%      +1.3199     +1.3033
 Dollar/Canadian  CAD=        1.3612         1.3423      +1.41%         +4.82%      +1.3759     +1.3463
 Australian/Doll  AUD=        0.6598         0.6645      -0.71%         -6.04%      +0.6685     +0.6323
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0595         1.0583      +0.11%         -2.38%      +1.0638     +1.0544
 Euro/Sterling    EURGBP=     0.8735         0.8650      +0.98%         +3.32%      +0.8769     +0.8658
 NZ               NZD=        0.6358         0.6355      +0.05%         -5.61%      +0.6448     +0.6158
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.5413         9.2520      +3.13%         +8.69%      +9.6748     +9.2957
 Euro/Norway      EURNOK=     10.9320        10.4350     +4.76%         +11.12%     +10.9940    +10.4380
 Dollar/Sweden    SEK=        9.4168         9.3886      +1.80%         +0.74%      +9.4461     +9.3091
 Euro/Sweden      EURSEK=     10.7920        10.6012     +1.80%         +3.08%      +10.7925    +10.6030
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Nick Macfie and Marguerita Choy)
  
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