* Talk of possible virus treatment sparks risk asset rally
* Death toll from coronavirus rises to 490
* U.S. private payrolls rise more than expected in January
* U.S. services sector activity picks up in January
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Adds new comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Feb 5 (Reuters) - The dollar gained against the safe-haven Japanese yen and Swiss franc on
Wednesday, as risk appetite rose on reports of a possible treatment for the new coronavirus out of China
that has caused major disruptions among global businesses.
The U.S. currency also benefited from a strong private-sector payrolls report for January, suggesting
the world's largest economy was on a stable growth path.
The focus, though, remained on the coronavirus, with the yen and Swiss franc falling after news
reports said a Chinese university had found a drug to treat infected people, and researchers in Britain
had made a "significant breakthrough" in finding a vaccine. Traders used the headlines to load up on risky assets.
"There is some optimism about having potentially a way to treat the symptoms from having the
coronavirus," said Erik Nelson, currency strategist, at Wells Fargo Securities in New York.
The latest coronavirus has so far claimed 490 lives, most in and around the locked-down central city
of Wuhan, where it emerged late last year. There have been two deaths in the Philippines and Hong Kong,
both following visits to Wuhan.
Investors overall were heartened as China's central bank injected substantial liquidity into the
financial system to cushion the economic fallout from the virus.
"The response we're seeing from Chinese authorities is not surprising," said Erik Bregar, head of FX
strategy, at Exchange Bank of Canada in Toronto. "They're doing everything they can to shore up investor
confidence and frankly we expect more of this kind of reporting."
Risk sentiment also improved after U.S. private-sector payrolls increased by 291,000 in January, the
ADP National Employment Report showed, far above expectations of an increase of 156,000 jobs. January's
job gains were the largest since May 2015.
In addition, U.S. services sector activity picked up last month, with industries reporting increases
in new orders. The Institute for Supply Management's non-manufacturing index rose to 55.5 last month, the
highest since August. "The U.S. has shown quite a bit of resilience for a long time and to the extent that the global
economy is going to turn the corner, that's good for the U.S.," said Wells Fargo's Nelson.
In afternoon trading, the dollar rose 0.3% against the yen to 109.71 yen JPY= , after earlier rising
to a two-week high of 109.84 yen. It also rose 0.5% versus the Swiss franc to 0.9738 franc CHF= .
The Australian dollar, a barometer of risk appetite toward China given Australia's close economic ties
with Beijing, was also well-bid, up 0.2% versus the dollar at US$0.6754 AUD= .
The Chinese currency in the offshore market also rebounded 0.2% against the dollar CNH=D3 , which
fell to 6.9751 yuan.
The euro, meanwhile, fell 0.4% to $1.0995 EUR= , pushing the dollar index up 0.4% at 98.308 .DXY ,
mostly related to U.S. private sector job gains.
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Currency bid prices at 2:59 PM (1959 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.0995 $1.1042 -0.43% -1.92% +1.1047 +1.0994
Dollar/Yen JPY= 109.8100 109.5100 +0.27% +0.88% +109.8400 +109.3100
Euro/Yen EURJPY= 120.75 120.96 -0.17% -0.98% +121.1400 +120.6600
Dollar/Swiss CHF= 0.9737 0.9690 +0.49% +0.61% +0.9747 +0.9679
Sterling/Dollar GBP= 1.2986 1.3029 -0.33% -2.04% +1.3069 +1.2958
Dollar/Canadian CAD= 1.3287 1.3272 +0.11% +2.32% +1.3302 +1.3262
Australian/Doll AUD= 0.6744 0.6737 +0.10% -3.95% +0.6774 +0.6725
Euro/Swiss EURCHF= 1.0708 1.0702 +0.06% -1.33% +1.0728 +1.0691
Euro/Sterling EURGBP= 0.8464 0.8474 -0.12% +0.12% +0.8490 +0.8435
NZ NZD= 0.6475 0.6488 -0.20% -3.87% +0.6502 +0.6470
Dollar/Dollar
Dollar/Norway NOK= 9.2074 9.2095 -0.02% +4.89% +9.2493 +9.1769
Euro/Norway EURNOK= 10.1240 10.1701 -0.45% +2.91% +10.2147 +10.1120
Dollar/Sweden SEK= 9.5871 9.5883 -0.44% +2.56% +9.6011 +9.5516
Euro/Sweden EURSEK= 10.5433 10.5902 -0.44% +0.71% +10.5985 +10.5280
Australian dollar https://tmsnrt.rs/2trCVPs
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