* U.S. manufacturing data jumps unexpectedly
* Iowa caucus, Brexit talks, coronavirus all in focus
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Hideyuki Sano
TOKYO, Feb 4 (Reuters) - The dollar held firm on Tuesday
after a key U.S. manufacturing survey showed a surprise
recovery, while concerns about a widening coronavirus outbreak
in China kept the yuan and the Australian dollar subdued.
The dollar index =USD rose 0.44% on Monday, the biggest
gain so far this year, and last stood at 97.802. It was boosted
by a report from the Institute for Supply Management (ISM)
reported that U.S. factory activity unexpectedly rebounded in
January after contracting for five straight months amid a surge
in new orders. Against the yen, the dollar traded at 108.62 yen JPY= ,
after a gain of 0.3% on Monday, the biggest gain in a downtrend
that started in mid-January.
The euro stood at $1.1062 EUR= , having slipped 0.3% on
Monday.
In Asia, coronavirus remained in focus as the number of
cases and deaths showed little sign of slowdown.
"The question is how long it will take to contain the
epidemic. While some people are selling risk assets, there are
also lots of people who are looking for a chance for
bargain-hunting," said Ayako Sera, market economist at Sumitomo
Mitsui Trust Bank.
"If we start to see a decline in the number of new cases,
then we could see an end. But at the moment, it is hard to say
when that will happen."
The offshore yuan traded at 7.0127 yuan per dollar CNH= ,
holding slightly above its one-month low of 7.0230 per dollar
hit in European trade on Monday.
The Australian dollar fetched $0.6690 AUD=D4 , within sight
of its 10 1/2-year low of $0.6670 touched last October, ahead of
an interest rate decision Reserve Bank of Australia (RBA) due
later in the day.
Although most investors expect the RBA to keep rates on hold
at this month's meeting, a cut has not been completely ruled
out, with markets pricing in a 100% chance of such a move by
Elsewhere, sterling fetched $1.2999 GBP=D4 , having lost
1.54% on Monday on renewed worries about Britain's relations
with the European Union. Prime Minister Boris Johnson set out
tough terms for Brexit talks with the European Union, rekindling
fears Britain would reach the end of an 11-month transition
period without agreeing a trade deal. Traders are also casting an eye on the U.S. state of Iowa,
where Democrats are kicking off a process to choose a challenger
to President Donald Trump. Market players say a victory by a progressive candidate such
Senator Bernie Sanders and Elizabeth Warren could hurt shares
and lift safe-haven currencies as some of their policies are
thought to be not in best interests of Wall Street.