* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Tracking the coronavirus: https://tmsnrt.rs/3aIRuz7
* Dollar recovers but sentiment is fragile
* Policymakers responding to external shocks
* Fed rate cut bets show more downside for greenback
By Stanley White
TOKYO, March 10 (Reuters) - The dollar steadied somewhat on
Tuesday after heavy losses against the yen, the euro and the
Swiss franc, but traders warn the risks to the greenback remain
high as policymakers try to fight off the widening fallout from
the coronavirus epidemic.
The U.S. currency started to grind higher as Wall Street
stock futures rose, and bond yields bounced, after U.S.
President Donald Trump said the White House will hold a news
conference on Tuesday about economic measures in response to the
virus.
U.S. Treasury Secretary Steve Mnuchin also said the White
House will meet with bank executives this week in a sign the
U.S. government is preparing to roll out more measures to soften
the blow from the spread of the flu-like virus.
However, analysts say it is too early to call a bottom in
the dollar, which was pummelled on Monday after a price war
between Saudi Arabia and Russia triggered the biggest daily rout
in oil prices since the 1991 Gulf War.
"Expectations for a coordinated policy response are
something that is evolving and ultimately this could help," said
Rodrigo Catril, senior FX strategist at National Australia Bank
in Sydney.
"But in the short term the dollar is driven by expectations
for U.S. Federal Reserve easing."
The dollar rose 2.3% to 104.73 yen JPY=EBS , pulling back
from the lowest in more than three years.
The yen also wobbled against major crosses, such as the euro
EURJPY=EBS and the Australian dollar AUDJPY=EBS , after Bank
of Japan officials indicated their readiness to ramp up stimulus
if needed before a policy meeting next week.
Against the euro EUR=EBS , the greenback rose 0.72% to
$1.13500 after falling on Monday to its lowest in more than a
year against the common currency.
The dollar rose 1.2% to 0.9361 Swiss franc CHF=EBS on
Tuesday after three days of heavy selling pushed it to the
lowest in almost five years. Data suggests the Swiss National
Bank is now ramping up its market interventions to weaken its
currency. Against the pound GBP=D3 , the U.S. currency rose 0.7% to
$1.3036.
The dollar gradually accelerated after U.S. stock futures
opened higher ESc1 and Treasury yields US10YT=RR climbed off
record lows.
Oil futures also bounced in Asia on Tuesday after the
previous day's dive, as global markets tried to regain some
composure, but many traders warn that recent turmoil has been so
dramatic that risks are still tilted down.
The plunge in crude prices on Monday was yet another jolt to
financial markets, which were already reeling as investors
counted the mounting economic costs of a global coronavirus
epidemic.
In the onshore market, the yuan CNY=CFXS rose a tad to
6.9330 per dollar. Chinese officials said growth in the number
of new cases of the coronavirus, which emerged in the central
Chinese province of Hubei late last year, is slowing.
However, its rapid spread in Italy and the United States is
likely to keep investors on edge. Money markets show the Fed, which stunned investors with a
surprise 50 basis point rate cut last week, is likely to ease
policy further in the future. FEDWATCH
The Fed is also injecting cash into the banking system in a
sign of underlying financing stress in the world's largest
economy. On the whole, despite Tuesday's respite for the dollar,
expectations for Fed easing are likely to bring the greenback
and U.S. yields back down.
The currencies of oil-producing countries also managed to
rise slightly after a mauling on Monday.
The Russian rouble RUB=EBS rose 2.7% against the dollar.
The Mexican peso MXN=EBS tacked on 0.8%, while the Norwegian
krone NOK=D3 edged 0.4% higher. The Canadian dollar CAD=D3
gained 0.5%, pulling back slightly from its lowest since 2017.
The Australian dollar AUD=D3 eased 0.6%, and the New
Zealand dollar NXD=D3 shed 0.7%, reflecting the greenback's
broad bounce.
The U.S. dollar and 10-Year U.S real yields https://tmsnrt.rs/32WoiRq
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