* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Safe-haven Swiss franc up on rising Mideast tensions
* Yen pulls back from three-month high but mood is cautious
* Gold surges to highest since 2013
By Stanley White
TOKYO, Jan 7 (Reuters) - The Swiss franc held gains against
the dollar on Tuesday as traders sought save-havens amid
heightened anxiety about potential Iranian retaliation to a U.S.
drone strike that killed its most prominent military commander.
The yen, another safe-haven currency, pulled back from a
three-month high versus the dollar, but sentiment remains
fragile due to the increasing worries about armed conflict
between the United States and Iran.
Highlighting the concerns, the U.S. currency nursed losses
against sterling and the euro as the emergence of a new
geopolitical flashpoint led some investors to reassess their
tolerance for risk at the start of the new year.
The United States has denied Iranian Foreign Minister
Mohammad Javad Zarif a visa to travel to New York for a United
Nations Security Council meeting on Thursday, according to a
U.S. official, raising questions about what steps Iran will take
next. "Sentiment clearly favours risk-off trades, but dollar/yen
is not falling much because Japanese importers are buying," said
Yukio Ishizuki, foreign exchange strategist at Daiwa Securities
in Tokyo.
"Excluding this real demand, the dollar is weak against
other currencies. This reflects the situation in the Mid-East,
but we need to see what happens next."
Against the dollar, the Swiss franc CHF=EBS was quoted at
0.9689 following a 0.5% jump on Monday toward its highest level
in more than a year.
The yen JPY=EBS was steady at 108.44 per dollar, off a
three-month high of 107.77 touched on Monday.
The dollar index .DXY against a basket of six major
currencies stood at 96.650, following a 0.2% decline on Monday.
The United States has no plans to pull its troops out of
Iraq, Defense Secretary Mark Esper said on Monday, following
reports of a U.S. military letter informing Iraq officials about
the repositioning of troops in preparation to leave.
This came after Friday's drone strike in Baghdad ordered by
U.S. President Donald Trump that killed Iranian military
commander Qassem Soleimani, widely seen as Iran's second most
powerful figure behind Supreme Leader Ayatollah Ali Khamenei.
The U.S. government says Soleimani was actively developing
plans to attack U.S. interests in Iraq and the Middle East.
Iran's leaders have promised to avenge the killing. Elsewhere in the currency market, the pound GDP=D3 traded
at $1.3174, following a 0.7% jump on Monday. The euro EUR=D3
was quoted at $1.1193 after a 0.4% gain in the previous session.
Spot gold XAU= , another safe-haven asset, fell 0.5% to
$1,558.62 per ounce, pulling back from a near seven-year high of
$1,579.72 reached on Monday. GOL/
Investors await data due later on Tuesday on the U.S. trade
balance, factory orders, and the services sector to measure the
health of the world's largest economy.
The United States and China are expected to sign a
preliminary deal on Jan. 15 to de-escalate a prolonged trade
war, but rising geopolitical risks threaten to overshadow the
benefits of reduced trade friction.
In the onshore market, the yuan CNY=CFXS edged slightly
higher to 6.9664 per dollar.