FOREX-Safe-haven currencies gain on worries of lingering economic pain

* Swiss franc at 3-month peak vs dollar, yen at 1-month high
* Aussie, Mexican peso among biggest losers after recent
rally
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Hideyuki Sano
TOKYO, June 12 (Reuters) - The safe-haven Swiss franc and
the yen held on to gains on Friday while the U.S. dollar also
held firm against riskier currencies after global stock prices
tumbled on renewed doubts over the prospects of a quick recovery
in the global economy.
Doubts over the economy stemmed in part from the U.S.
Federal Reserve's dire economic assessment as well as fears over
new coronavirus infections, though some analysts said a stock
market correction was inevitable after a rally.
The Swiss franc rose to 0.94395 per dollar CHF= , having
hit a three-month high of 0.9376 on Thursday.
The franc has recovered its lost ground against the euro
over the past two weeks to trade at 1.0665 to the euro
EURCHF= .
The yen also rose to 106.79 yen per dollar JPY= . It hit a
one-month high of 106.58 on Thursday, having gained 3.1% from a
2-1/2-month low hit just a week ago.
Following its two-day meeting, the Fed signalled on
Wednesday it plans years of extraordinary support for the U.S.
economy, which policymakers project will shrink by 6.5% in 2020,
with the unemployment rate at 9.3%. Although that appears to have triggered selling in shares,
analysts have said Fed officials have been cautious all along,
especially compared to the bullish mood in financial markets
until earlier this year.
"It is almost mudslinging to blame the stock falls on the
Fed's dour assessment. Most market players have acknowledged
that the stock rally has been driven by excess liquidity and the
Fed's accommodative stance is unlikely to push stocks lower,"
said Makoto Noji, chief currency strategist at SMBC Nikko
Securities.
"In short, it was a correction from an overbought market,
which should not last long. But what we should be careful is
that the market's fall could continue if we have more bad news
from China and Europe for instance."
The tensions between the United States and China have shown
limited signs of abating while Europe is facing tough
negotiations next week on its recovery fund plan.
Investors were also worried about new coronavirus infections
as the world gradually reopened following shutdowns aimed at
curbing the spread of the disease.
In the United States, new infections are rising slightly
after five weeks of declines, according to a Reuters analysis.
Part of the increase is due to more testing, which hit a
record high on June 5 of 545,690 tests in a single day but has
since fallen. The dollar held firmer against risk sensitive currencies.
The euro stood at $1.1299 EUR= , off Wednesday's
three-month high of $1.14225.
Similarly, the British pound slipped to $1.2582 from
Wednesday's high of $1.2812.
The Australian dollar tumbled to $0.6838 AUD=D2 , having
fallen 2% in the previous session, the biggest daily fall since
the market turmoil of March.
The Mexican peso lost 3.8% and dipped further in Asia to
22.85 to the dollar MXN= .