* Yen bounces after worst 2-day performance since September
* U.S. services, manufacturing sectors hit wall in February
* Euro, pound get respite after better-than-expected PMI
(Updates to U.S. afternoon)
By Saqib Iqbal Ahmed
NEW YORK, Feb 21 (Reuters) - The U.S. dollar fell across the
board on Friday after a survey of purchasing managers showed
U.S. business activity in the manufacturing and services sectors
stalled in February and as investors fretted over the
fast-spreading coronavirus.
The IHS Markit flash services sector Purchasing Managers'
Index dropped to 49.4 this month, the lowest since October 2013
and signaling that a sector accounting for roughly two-thirds of
the U.S. economy was in contraction for the first time since
2016. Economists polled by Reuters had forecast a reading of 53.
The manufacturing sector barely escaped a slip into
contraction, with a flash reading of 50.8, the lowest since
August.
Against a basket of six other currencies, the U.S. dollar
was down 0.59%.
The euro was 0.68% higher against the greenback. Business
activity in the euro zone picked up more than expected this
month, a business survey showed on Friday, in welcome news for
policymakers at the European Central Bank, who are trying to
revive growth and chronically low inflation. "There are finally signs that the euro zone can indeed
recover, perhaps slowly, and if things are going to go the way
of contraction here in the U.S., that plays poorly for the
buck," said Juan Perez, senior foreign exchange trader and
strategist at Tempus Inc.
The dollar's broad weakness and increased demand for safe
havens helped the yen pull back from a 10-month low hit in the
previous session.
The yen, which lost 2% against the dollar in the previous
two days amid worries about the health of the Japanese economy,
was up 0.5% against the greenback on Friday.
Coronavirus cases in South Korea and Japan, coupled with
this week's dismal economic news out of Japan that stirred talk
the country is already in recession, pressured the Japanese
currency this week.
"Fundamentally, the case is clearly a bearish one for the
yen, though the dynamics underpinning the currency as a safe
haven should keep the Japanese currency on the list of
outperforming currencies," Jonathan Coughtrey, managing director
at Action Economics, said in a note.
The yen typically rises during geopolitical or financial
stress as Japan is the world's biggest creditor nation.
The new coronavirus has infected hundreds of people in
Chinese prisons, authorities said on Friday, contributing to a
jump in reported cases beyond the epidemic's epicenter in Hubei
province, including 100 more in South Korea. The Australian dollar recovered ground to trade up 0.2%
against its U.S. counterpart after slipping to an 11-year low on
Friday. The impact of the coronavirus epidemic in China, the
biggest export market for Australia, has pressured the Aussie in
recent sessions. The New Zealand dollar was up 0.41%, pulling
back from a more than three-month low hit on Thursday.
Sterling rose against the dollar after British factories
reported the fastest rise in output for 10 months in February,
assuaging some fears over the economy as Britain prepares for
trade talks with the European Union. The pound was up 0.72%
against the greenback.
Euro trashed https://tmsnrt.rs/2unOBn2
World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
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