* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Tracking the coronavirus: https://tmsnrt.rs/3aIRuz7
* Fed rate cut fails to stabilise equities
* Coronavirus roils financial markets
* Dollar sold as investors bet more easing is likely
By Stanley White
TOKYO, March 4 (Reuters) - The dollar fell to a five-month
low versus the yen after an emergency 50 basis point cut in
interest rates by the U.S. Federal Reserve was deemed
insufficient to offset downside risks posed by the global spread
of the coronavirus.
The greenback traded near the lowest in almost two years
against the Swiss franc as investors flocked to traditional safe
havens.
The euro was one of the currencies to benefit most from the
broad-based dollar weakness as traders bet the Fed will cut
rates more than the European Central Bank.
Disappointment that a Group of Seven statement on Tuesday
did not lay out a specific response to a global slowdown caused
by the coronavirus has reinforced the view among some investors
that policymakers have fallen behind the curve.
"The G7 and the Fed were not enough to support markets,"
said Masafumi Yamamoto, chief currency strategist at Mizuho
Securities in Tokyo.
"This Fed rate cut is bad for dollar/yen, partly because
Treasury yields are now very low. The dollar's weakness is
reflected in the euro, because the Fed will likely ease more
that the ECB."
The dollar fell to 106.85 yen JPY=EBS in Asia on
Wednesday, its lowest in almost five months.
The greenback bought 0.9566 Swiss franc CHF=EBS , close to
its weakest level in almost two years.
The Fed surprised investors by cutting rates by 50 basis
points to a target range of 1.00% to 1.25% on Tuesday, two weeks
ahead of a regularly scheduled policy meeting. Interest rate futures traders pricing in a 51.4% probability
of a further 25 basis point cut in April, according to the CME
Group's FedWatch Tool.
The rate cut failed to arrest a sell-off in U.S. equities
and sent benchmark 10-year Treasury yields US10YT=RR crashing
to a record low 0.906%, further reducing the appeal of the
dollar.
A novel coronavirus that emerged in China late last year
has spread to more than 60 countries and claimed more than 3,000
lives. Travel restrictions and factory closures aimed at halting
the spread of the virus raise the risk of a global recession.
Sentiment also took at a hit after G7 finance ministers
issued a statement on Tuesday that stopped short of calling for
new government spending or coordinated central bank interest
rate cuts. Broad-based selling in the dollar encouraged euro bulls to
aggressively buy the common currency.
The euro EUR=EBS last traded at $1.1173, close to a
one-month high reached on Tuesday.
Against sterling, the euro EURGBP=D3 traded at 87.15
pence, close to the highest in almost four months.
Sterling GBP=D3 bought $1.2817, holding onto modest gains
from the previous session.
Uncertainty about trade talks between Britain and the
European Union is weighing on sterling, along with growing
expectations for UK interest rate cuts.
Money markets are now fully pricing in a cut of 25 basis
points on March 26 when the Bank of England next meets.
Almost two cuts are priced by the end of 2020, compared to
none a few weeks ago. BOEWATCH=