August 9, 2019 / 7:29 PM / 2 months ago

FOREX-Yen, Swiss franc advance on trade fears, bleak global data

    * Yen strengthens beyond 106 as investors look for safety
    * Swiss franc rises on safe-haven bids 
    * Italian politics, soft global data weighs on risk appetite
    * Dollar headed for biggest weekly decline since June
    * GRAPHIC-World FX rates in 2019: tmsnrt.rs/2egbfVh

 (Adds new comment, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Aug 9 (Reuters) - The yen and Swiss franc gained on Friday as investors sought safe-haven
currencies due to U.S.-China trade war concerns, political uncertainty in Italy, and weak economic data
around the world.
    Deep liquidity and current account surpluses in Japan and Switzerland attract safe-haven flows to
their currencies during times of geopolitical and economic stress.
    "The strength of the yen will not be welcomed by the BoJ (Bank of Japan), which continues to struggle
to push Japanese CPI inflation towards its 2% goal," said Jane Foley, senior FX strategist at Rabobank in
London.
    The yen soared to a seven-month high against the dollar.
    "The recent escalation in trade wars between the U.S. and China suggests there is potential for robust
demand for safe-haven assets going forward and this implies ample scope for a firmer yen," she added.
    The same holds true for the Swiss franc, Foley said, with the economy also in a much better budget
position than Japan.
    U.S. stocks fell sharply after President Donald Trump said on Friday that he was not ready to make a
trade deal with China and had decided that the United States would not do business with Chinese telecoms
giant Huawei Technologies for the time being.
    Also on Friday, data showed underlying U.S. producer prices fell 0.1% in July, suggesting inflation
remained muted, and Canada's economy lost 24,200 jobs last month.
    In Britain, the economy shrank for the first time since 2012 in the second quarter and sterling slid
to a 31-month low against the dollar.
    "Take your pick. You look around the world, all the data were negative or at least concerning," said
John Doyle, vice president for dealing and trading at Tempus in Washington. "Of course, you're going to
see an uptick in the Swissie (franc) and the yen."
    A sell-off in Italian bonds after the League party filed a no-confidence motion against its own
governing coalition also added to the global tension. The party's populist chief Matteo Salvini hopes that
the move will trigger early elections and install him as the new leader.
    The dollar weakened against a basket of currencies, pressured as Trump repeated his call for a weaker
currency to help American manufacturers. 
    Trump told reporters at the White House he believes the Federal Reserve needs to lower interest rates
by a full percentage point.
    In afternoon trading, the dollar fell 0.5% against a surging yen to 105.58 yen, after earlier
dropping to a seven-month low of 105.25. The yen posted its second weekly gain versus the U.S. dollar and
its third weekly rise versus the Australian and New Zealand dollars.
    The Swiss franc rose versus the dollar and euro. The dollar was last down 0.3% at 0.9723 franc,
while the euro slipped 0.1% at 1.0892 francs.
    The euro rose 0.2% against the dollar to $1.1205, showing little reaction after Salvini called
for early elections.
    The dollar index dipped 0.1% slipped to 97.508, posting its biggest weekly decline since
June 21.
    Sterling fell 0.7% to $1.2050 against the dollar and 0.7% versus the euro, which rose to 92.81
pence, after the UK's weak data.
    
    ========================================================
    Currency bid prices at 2:56 PM (1856 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1203        $1.1178     +0.22%         -2.32%      +1.1222     +1.1181
 Dollar/Yen       JPY=        105.5700       106.0600    -0.46%         -4.25%      +106.1100   +105.2700
 Euro/Yen         EURJPY=     118.30         118.58      -0.24%         -6.27%      +118.7200   +118.0900
 Dollar/Swiss     CHF=        0.9726         0.9746      -0.21%         -0.90%      +0.9754     +0.9710
 Sterling/Dollar  GBP=        1.2048         1.2131      -0.68%         -5.56%      +1.2153     +1.2049
 Dollar/Canadian  CAD=        1.3206         1.3224      -0.14%         -3.16%      +1.3274     +1.3204
 Australian/Doll  AUD=        0.6789         0.6800      -0.16%         -3.69%      +0.6818     +0.6780
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0897         1.0897      +0.00%         -3.17%      +1.0913     +1.0889
 Euro/Sterling    EURGBP=     0.9296         0.9213      +0.90%         +3.47%      +0.9301     +0.9208
 NZ               NZD=        0.6461         0.6478      -0.26%         -3.81%      +0.6498     +0.6463
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.8702         8.9261      -0.63%         +2.68%      +8.9324     +8.8504
 Euro/Norway      EURNOK=     9.9402         9.9797      -0.40%         +0.35%      +9.9955     +9.9101
 Dollar/Sweden    SEK=        9.5442         9.5982      -0.35%         +6.47%      +9.6066     +9.5257
 Euro/Sweden      EURSEK=     10.6946        10.7321     -0.35%         +4.20%      +10.7476    +10.6648
 
    
    

    
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by David Gregorio and Sonya Hepinstall)
  
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