* Talk of possible virus treatment sparks risk asset rally
* Death toll from coronavirus rises to 490
* U.S. private payrolls rise more than expected in January
* U.S. services sector activity picks up in January
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Adds Hong Kong dollar hitting nearly four-year high vs the U.S. dollar, Trump's impeachment acquittal;
updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Feb 5 (Reuters) - The dollar gained against the safe-haven Japanese yen and Swiss franc on
Wednesday, as risk appetite rose on reports of a possible treatment for the new coronavirus out of China,
which has caused major disruptions in the global economy and businesses around the world
The U.S. currency also benefited from a strong private-sector payrolls report for January, suggesting
the world's largest economy was on a stable growth path.
The focus, though, remained on the coronavirus, with the yen and Swiss franc falling after news
reports said a Chinese university had found a drug to treat infected people, and researchers in Britain
had made a "significant breakthrough" in finding a vaccine. Traders used the headlines to
load up on risky assets.
"There is some optimism about having potentially a way to treat the symptoms from having the
coronavirus," said Erik Nelson, currency strategist at Wells Fargo Securities in New York.
The World Health Organization, however, played down the reports of "breakthrough" drugs being
discovered, saying that there are "no known effective therapeutics." The virus so far has claimed 490 lives, most in and around the locked-down central Chinese city of
Wuhan, where it emerged late last year. There have been two deaths in the Philippines and Hong Kong, both
following visits to Wuhan.
Investors overall were heartened as China's central bank injected substantial liquidity into the
financial system to cushion the economic fallout from the virus.
"The response we're seeing from Chinese authorities is not surprising," said Erik Bregar, head of FX
strategy at Exchange Bank of Canada in Toronto. "They're doing everything they can to shore up investor
confidence, and frankly we expect more of this kind of reporting."
Risk sentiment also improved after the ADP National Employment Report showed that U.S. private-sector
payrolls increased by 291,000 in January, far above expectations for an increase of 156,000 jobs.
January's job gains were the largest since May 2015.
In addition, U.S. services sector activity picked up last month, with industries reporting increases
in new orders. The Institute for Supply Management's non-manufacturing index rose to 55.5 last month, the
highest since August. In afternoon trading, the dollar rose 0.3% against the yen to 109.83 yen JPY= , after earlier hitting
a two-week high of 109.84 yen. Against the Swiss franc it rose 0.5%, to 0.9738 franc CHF= .
The dollar held gains after President Donald Trump was acquitted late Wednesday in his U.S. Senate
impeachment trial. The Senate voted 52-48 to acquit him of abuse of power stemming from his request that
Ukraine investigate political rival Joe Biden, a contender for the Democratic nomination to face Trump in
the Nov. 3 election. The Australian dollar, a barometer of risk appetite toward China given Australia's close economic ties
with Beijing, was also well-bid, up 0.2% versus the dollar at US$0.6754 AUD= .
The Chinese currency in the offshore market also rebounded 0.2% against the dollar CNH=D3 , which
fell to 6.9751 yuan.
The Hong Kong dollar rose sharply as well, hitting its highest level since March 2017 against the U.S.
dollar, which was last down at HK$7.7619 HKD= .
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Currency bid prices at 4:45 PM (2145 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.0997 $1.1042 -0.41% -1.90% +1.1047 +1.0994
Dollar/Yen JPY= 109.8300 109.5100 +0.29% +0.89% +109.8400 +109.3100
Euro/Yen EURJPY= 120.79 120.96 -0.14% -0.95% +121.1400 +120.6600
Dollar/Swiss CHF= 0.9738 0.9690 +0.50% +0.62% +0.9747 +0.9679
Sterling/Dollar GBP= 1.2997 1.3029 -0.25% -1.98% +1.3069 +1.2958
Dollar/Canadian CAD= 1.3282 1.3272 +0.08% +2.28% +1.3302 +1.3262
Australian/Doll AUD= 0.6746 0.6737 +0.13% -3.92% +0.6774 +0.6725
Euro/Swiss EURCHF= 1.0709 1.0702 +0.07% -1.32% +1.0728 +1.0691
Euro/Sterling EURGBP= 0.8460 0.8474 -0.17% +0.07% +0.8490 +0.8435
NZ NZD= 0.6474 0.6488 -0.22% -3.89% +0.6502 +0.6470
Dollar/Dollar
Dollar/Norway NOK= 9.2144 9.2095 +0.05% +4.97% +9.2493 +9.1769
Euro/Norway EURNOK= 10.1345 10.1701 -0.35% +3.01% +10.2147 +10.1120
Dollar/Sweden SEK= 9.5819 9.5883 -0.48% +2.51% +9.6011 +9.5516
Euro/Sweden EURSEK= 10.5397 10.5902 -0.48% +0.67% +10.5985 +10.5280
Australian dollar https://tmsnrt.rs/2trCVPs
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