* Investors shake off China virus worries
* Sterling gains further as BoE rate-cut fears recede
(Updates to U.S. afternoon trading)
By Saqib Iqbal Ahmed
NEW YORK, Jan 22 (Reuters) - The U.S. dollar was unchanged
against a basket of currencies on Wednesday as safe-haven demand
ebbed along with worries about whether the spread of a flu-like
coronavirus would hurt the global economy.
The dollar index .DXY , which measures the greenback
against six other major currencies, was flat at 97.534.
Deaths from China's new flu-like virus rose to 17, with more
than 540 cases confirmed, leading the city at the center of the
outbreak to close transport networks and urge citizens to stay
home to limit the spread of the contagion. China's response and candor, in contrast to how it handled
the 2002-03 Severe Acute Respiratory Syndrome (SARS) epidemic,
reassured investors concerned about possible global fallout.
"The virus concern is settling down a bit overnight as the
market is getting a little more transparency around the issue
from China and other nations than they did with SARS for
example," Brad Bechtel, managing director, Jefferies in New
York, said in a note.
Investors' demand for other safe-haven currencies was also
muted. Against the Japanese yen and the Swiss franc, which tend
to draw investors during times of geopolitical or financial
stress, the dollar was little-changed.
"Doesn't mean we are out of the woods on this issue just yet
as I still expect a steady drone of negative headlines until we
truly have everything contained but for now things have
settled," he said.
The franc was pressured this week after data indicated the
country's central bank had stepped up intervention to stop its
currency from appreciating.
The Swiss National Bank, which has had an interventionist
approach to the franc as it struggles to boost inflation in the
export-oriented economy, declines to talk about its currency
management policy. Investors use weekly sight deposit data as a
proxy to estimate how active it has been in currency markets.
Data published on Monday showed an increase in the amount of
cash that domestic commercial banks hold with the Swiss National
Bank. Among the majors, Britain's pound was the biggest mover,
rising 0.65% against the dollar as investors debated whether the
Bank of England would cut interest rates next week. The Canadian dollar was down about 0.5% against the
greenback after the Bank of Canada maintained its key overnight
interest rate at 1.75% as expected, but opened the door to a
possible cut should slow growth continue.
Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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