March 11, 2020 / 2:06 PM / 21 days ago

FOREX-Dollar falls vs yen, Swiss franc; sterling up after BoE rate cut

    * 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

 (Adds new comment, FX table, updates prices, changes byline, dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, March 11 (Reuters) - The U.S. dollar resumed its decline against the Japanese yen and Swiss
franc on Wednesday, as fears over the spreading coronavirus pushed investors into safe havens, even as
sterling recovered 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 after 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.
    U.S. President Donald Trump said on Tuesday he would ask Congress for a payroll tax cut and other
"very major" stimulus moves, but the details remain unclear.
    Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York, said U.S.
leadership on the coronavirus issue seems lacking. 
    He added that this has created a "clear vacuum in the markets and other authorities are trying to step
into the void to calm financial markets and restore a semblance of trust and confidence in a system that
is quickly spinning out of control."
    Sterling initially fell as much as 0.4% against the dollar and 1.2% against the euro after the BoE cut
its benchmark rate by 50 basis points, to 0.25%.
    But the pound rebounded as the move - including actions to support bank borrowing - reassured some
investors. The pound was last up 0.3% at $1.2954.
    Against the euro, the pound slipped 0.1% to 87.65 pence per euro.
    The dollar was down sharply against the safe-haven Japanese yen and Swiss franc. It lost nearly 1% to
104.62 yen, falling more than a full yen from Tuesday's high of 105.915. 
    The dollar also fell 0.7% against the Swiss franc to 0.9336 franc, while the euro rose 0.6% to
    Against a basket of currencies, the dollar fell 0.3% to 96.061.
    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.      
    "The pound sold off initially on the aggressive move but the statement shows that their (BoE) action
is coordinated with the Treasury and the measures include a package for lending," said Jane Foley, senior
currency strategist at Rabobank.
    "Altogether the statement suggests lots of co-ordination. This is reassuring and should help limit the
impact on the economy and that could also help support the pound."
    Currency bid prices at 9:51 AM (1351 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1341        $1.1279     +0.55%         +1.17%      +1.1366     +1.1278
 Dollar/Yen       JPY=        104.5800       105.6300    -0.99%         -3.93%      +105.6700   +104.1100
 Euro/Yen         EURJPY=     118.64         119.16      -0.44%         -2.73%      +119.2100   +118.1500
 Dollar/Swiss     CHF=        0.9333         0.9397      -0.68%         -3.56%      +0.9403     +0.9326
 Sterling/Dollar  GBP=        1.2949         1.2906      +0.33%         -2.34%      +1.2976     +1.2843
 Dollar/Canadian  CAD=        1.3732         1.3722      +0.07%         +5.74%      +1.3751     +1.3681
 Australian/Doll  AUD=        0.6526         0.6505      +0.32%         -7.05%      +0.6539     +0.6481
 Euro/Swiss       EURCHF=     1.0587         1.0603      -0.15%         -2.44%      +1.0612     +1.0576
 Euro/Sterling    EURGBP=     0.8757         0.8737      +0.23%         +3.58%      +0.8840     +0.8716
 NZ               NZD=        0.6312         0.6269      +0.69%         -6.29%      +0.6342     +0.6259
 Dollar/Norway    NOK=        9.5799         9.5960      -0.17%         +9.13%      +9.6187     +9.5460
 Euro/Norway      EURNOK=     10.8671        10.8260     +0.38%         +10.46%     +10.9002    +10.8228
 Dollar/Sweden    SEK=        9.4460         9.5211      -0.23%         +1.05%      +9.5258     +9.4303
 Euro/Sweden      EURSEK=     10.7162        10.7411     -0.23%         +2.34%      +10.7795    +10.6977
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Iain Withers in London
Editing by Nick Zieminski)
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