March 11, 2020 / 8:16 PM / a month ago

FOREX-Dollar slides vs yen, Swiss franc as risk appetite plummets

    * Pound erases early losses after BoE's rate cut
    * Dollar down vs yen, Swiss franc,  euro
    * Market remains nervous about U.S. coronavirus outbreak
    * Money markets pricing in ECB cut on Thursday
    * Graphic: World FX rates in 2020

 (New throughout, updates prices, market activity and comments)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, March 11 (Reuters) - The U.S. dollar dropped on Wednesday against the Japanese yen and Swiss
franc, in line with the stock market's plunge, as fears over the spreading coronavirus pushed investors
into safe havens, even as sterling fluctuated between gains and losses after the Bank of England
unexpectedly cut interest rates.
    Central banks and governments around the world are scrambling to limit the economic damage of the
coronavirus outbreak, which has sent stock markets into a tailspin as investors head for the safety of
government bonds.
    Investors were also disappointed as President Donald Trump made no major announcements on stimulus
measures. Expectations that Trump will unveil a significant stimulus plan had bolstered risk appetite on
Tuesday and prompted investors to temporarily move away from safer assets.
    Trump did say on Tuesday he would ask Congress for a payroll tax cut and other "very major" stimulus
moves, but the details remained unclear.
    "The lack of U.S. leadership, both domestically and internationally, is not boosting investor
confidence," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
    Trump on Wednesday again sought to calm fears about the fast-spreading coronavirus and said on Twitter
he would use all government resources necessary to combat it. He gave no further details.
    Sterling earlier rebounded on the BoE's 50 basis-point rate cut, as the move including actions to
support bank borrowings, reassured investors.
    But the pound eventually fell, tracking the drop in stocks and risk appetite overall, sliding 0.6% to
    Against the euro, the pound eased 0.6% 87.87 pence per euro.
    The dollar was down sharply against the safe-haven yen and Swiss franc. It lost 0.9% to 104.72 yen
, falling more than a full yen from Tuesday's high of 105.915. 
    The dollar also fell 0.2% against the Swiss franc to 0.9378 franc, while the euro was little
changed against the dollar at $1.1274.
    Against a basket of currencies, the dollar was up 0.2% at 96.517.
    Money markets are fully pricing in a further 10 basis-point cut by the European Central Bank when it
meets on Thursday.
    The BoE rate cut follows similar moves by U.S. and Canadian central banks and puts more pressure on
the ECB to act, although it has limited room with rates already negative.
    "We are preparing for the ECB tomorrow, which could do something," said Bannockburn's Chandler. "The
BoE gave us a taste of what could happen. We're expecting something major from the ECB."
    Currency bid prices at 4:05PM (2005 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1274        $1.1279     -0.04%         +0.57%      +1.1366     +1.1258
 Dollar/Yen       JPY=        104.6800       105.6300    -0.90%         -3.84%      +105.6700   +104.1100
 Euro/Yen         EURJPY=     118.04         119.16      -0.94%         -3.21%      +119.2100   +117.5500
 Dollar/Swiss     CHF=        0.9380         0.9397      -0.18%         -3.08%      +0.9403     +0.9326
 Sterling/Dollar  GBP=        1.2815         1.2906      -0.71%         -3.35%      +1.2976     +1.2806
 Dollar/Canadian  CAD=        1.3752         1.3722      +0.22%         +5.90%      +1.3779     +1.3681
 Australian/Doll  AUD=        0.6489         0.6505      -0.25%         -7.58%      +0.6539     +0.6481
 Euro/Swiss       EURCHF=     1.0578         1.0603      -0.24%         -2.52%      +1.0612     +1.0573
 Euro/Sterling    EURGBP=     0.8796         0.8737      +0.68%         +4.05%      +0.8840     +0.8716
 NZ               NZD=        0.6273         0.6269      +0.06%         -6.87%      +0.6342     +0.6259
 Dollar/Norway    NOK=        9.7058         9.5960      +1.14%         +10.56%     +9.7088     +9.5460
 Euro/Norway      EURNOK=     10.9440        10.8260     +1.09%         +11.24%     +10.9498    +10.8228
 Dollar/Sweden    SEK=        9.5072         9.5211      -0.20%         +1.71%      +9.5356     +9.4303
 Euro/Sweden      EURSEK=     10.7195        10.7411     -0.20%         +2.39%      +10.7795    +10.6944
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Nick Zieminski and David Gregorio)
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