* Fourth person dies from pneumonia in city of Wuhan
* Yuan down 0.6% vs dollar in offshore trade
* Safe haven yen, Swiss franc gain
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Dhara Ranasinghe
LONDON, Jan 21 (Reuters) - China's yuan tumbled on Tuesday,
pulling away from six-month highs against the dollar, while the
yen rallied as the spread of a pneumonia-like virus in China
sparked a sudden bout of risk aversion and rattled world
markets.
China reported a fourth death from a new coronavirus as the
number of cases continued to rise, just as hundreds of millions
of Chinese prepared to travel for the Lunar New Year holiday.
Global stocks fell as the outbreak rekindled memories of the
Severe Acute Respiratory Syndrome (SARS) in 2002/2003, another
coronavirus which broke out in China and killed nearly 800
people in a global pandemic. MKTS/GLOB
"You've got a stronger yen, a stronger Swiss franc and risk
aversion is setting in across everything," said Kit Juckes, an
analyst at Societe Generale.
"It would be very surprising if it was a trend-changer in
terms of where things go from here, but it is early days."
In currency markets, the yuan bore the brunt of the jitters,
tumbling almost 0.7% in offshore trading to 6.9126 per dollar
CNH=D3 , off six-month highs hit just on Monday. Onshore, the
yuan hit its lowest in over a week at 6.9094 CNY=CFXS .
The moves rippled across Asia to currencies linked to
Chinese trade and tourism, with the Australian dollar AUD=D3
shedding 0.4% to $0.68445, its lowest in over a month.
The New Zealand dollar NZD=D3 was down a third of a
percent at $0.6590, while the Korean won dropped 0.8%
KRW= .
In contrast, the yen JPY=EBS firmed 0.2% to 109.97 per
dollar as investors rushed for safe-haven assets such as the
Japanese currency and U.S. Treasuries US10YT=RR .
The Swiss franc too firmed a touch at 0.96800 to the dollar
CHF=EBS .
The dollar index .DXY , which measures the greenback's
value against a basket of six currencies, was steady at 97.602
-- near the highest level in a month.
The euro and sterling softened against the dollar EUR=EBS
GBP=D3 , with focus turning to data later this session for
latest clues on the economic outlook.
Europe's single currency traded at $1.10875. It was locked
in a narrow range before Thursday's European Central Bank (ECB)
meeting that is expected to launch a comprehensive review of
central bank strategy, including the ECB's inflation target.
The scope and scale of the review will be a key focus, given
the far-reaching implications for monetary policy.
A slightly brighter tone to data means the ECB's assessment
of the economic outlook will also be watched closely.
Earlier on Tuesday, the Bank of Japan kept its short-term
interest rate target at minus 0.1% and its pledge to guide
10-year government bond yields around zero.