* Japanese yen at 9-month low
* New coronavirus cases subside
* U.S. Dollar Currency Index at highest since May 2017
(New throughout, updates prices, market activity and comments
to U.S. afternoon)
By Saqib Iqbal Ahmed
NEW YORK, Feb 19 (Reuters) - The U.S. dollar climbed on
Wednesday to near a three-year high against a basket of other
currencies and the safe-haven yen fell to a nine-month low as
investor risk appetite grew due to a decline in the number of
new coronavirus cases in China and expectations for more policy
stimulus.
The dollar drew support from strong U.S. data and minutes of
the Federal Reserves' last policy meeting, which showed cautious
optimism on the economy. China posted the lowest daily rise in new coronavirus cases
since Jan. 29. Many view Chinese data on the virus
with skepticism, but sentiment was lifted by a Bloomberg report
that Beijing was considering cash injections or mergers to bail
out airlines hit by the virus. Such steps would follow this
week's cut in the medium-term lending rate. "China is trying to rev up some stimulus to offset some of
the negative economic impacts from the issues going on with the
coronavirus," said Minh Trang, senior FX trader at Silicon
Valley Bank in Santa Clara, California.
Against the Japanese yen the dollar rose 1.29% to 111.28,
its highest since May. The yen, which benefits during
geopolitical or financial stress as Japan is the worlds biggest
creditor nation, logged its biggest daily loss in six months.
Japan's economy shrank in the December quarter at the
fastest pace in almost six years, and Trang said worries about
this also weighed on the yen.
Fed minutes also supported the dollar, showing showed
policymakers cautiously optimistic about holding interest rates
steady despite risks caused by the coronavirus outbreak.
The greenback was also boosted by data that showed U.S.
homebuilding fell less than expected in January while permits
surged to a near 13-year high. Other data showed
producer prices last month increased by the most in more than
one year.
The U.S. Dollar Currency Index =USD , measuring the
greenback against six major currencies, rose as high as 99.73,
before paring gains to trade up 0.16% at 99.601.
The euro edged higher to rise slightly above $1.08.
The single currency had fallen to a three-year low after a
survey showed weakening confidence in Germany.
Sterling slipped back under $1.30 to hit its lowest level in
over a week, shrugging off data showing an unexpected surge in
UK inflation to a six-month high in January as focus returned to
Britain's trade talks with the European Union and government
plans to boost spending.
Yen hits 9-month low as virus case count slows png https://tmsnrt.rs/39KSAJ7
Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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