* Safe havens gain as coronavirus threatens economic
slowdown
* Fed cuts rates to zero, launches QE
(New throughout, updates prices and market activity, adds G7
leaders' comments)
By Karen Brettell
NEW YORK, March 16 (Reuters) - The safe-haven Japanese yen
jumped on Monday as investors worried about the spreading
coronavirus outbreak fled riskier assets, even after the U.S.
Federal Reserve slashed rates to zero and launched what is
effectively a new round of quantitative easing.
The Fed cut U.S. interest rates on Sunday and said it would
expand its balance sheet by at least $700 billion in the coming
weeks. The move is expected to help resolve some market
dislocations including illiquidity in the U.S. Treasury market,
but companies may still struggle as people avoid going out
because of the virus and some businesses face mandatory
shutdowns.
“What's needed is more direct support to industries that are
hit directly by the virus. That can only be provided by fiscal
policy, and governments have not shown the same swift reaction
that central banks have,” said Marshall Gittler, head of
investment research at BDSwiss Group.
Leaders of the Group of Seven wealthy democracies said they
were committed to doing "whatever is necessary" to battle the
coronavirus pandemic and to work together more closely to
protect public health, jobs and growth. The dollar index against a basket of major currencies =USD
gained 0.24% to 98.11 while the dollar dipped 1.60% to 106.18
yen JPY= .
The euro EUR= gained 0.49% against the greenback to $1.11.
The greenback has gained in the past week as companies drew
on credit lines and bank lenders sought out the currency to fund
the loans. That has led to strains in sourcing dollars.
To address this, the Fed and other major foreign central
banks also cut pricing on their swap lines to make it easier to
provide dollars to financial institutions around the world.
Multiple global central banks acted to ease conditions on
Monday.
The Bank of Japan said at an emergency meeting it would buy
more corporate bonds, commercial debt and establish a new
corporate lending scheme. New Zealand's central bank slashed
rates in an emergency move while the Reserve Bank of Australia
(RBA) injected extra cash into the financial system.
The People's Bank of China injected 100 billion yuan ($14.28
billion) into financial institutions, minutes before data showed
China's retail sales, industrial output and fixed-asset
investment all tumbled in January and February. "The measures introduced to stop the spread of the virus in
China may have led to a sharper slowdown in activity than will
be the case elsewhere, but it's clear that the measures central
banks have taken, and whatever they do next, cannot prevent a
major economic hit being felt globally," Societe Generale
strategist Kit Juckes said.
The dollar was last down 0.19% against the offshore yuan
CNH= at 7.007.
========================================================
Currency bid prices at 3:22PM (1922 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1159 $1.1105 +0.49% -0.46% +1.1236 +1.1047
Dollar/Yen JPY= 106.1800 107.9100 -1.60% -2.46% +107.9100 +105.1600
Euro/Yen EURJPY= 118.48 119.91 -1.19% -2.85% +119.8700 +117.1700
Dollar/Swiss CHF= 0.9481 0.9496 -0.16% -2.04% +0.9544 +0.9393
Sterling/Dollar GBP= 1.2245 1.2276 -0.25% -7.65% +1.2429 +1.2203
Dollar/Canadian CAD= 1.3970 1.3803 +1.21% +7.58% +1.4015 +1.3735
Australian/Doll AUD= 0.6126 0.6182 -0.91% -12.75% +0.6303 +0.6081
ar
Euro/Swiss EURCHF= 1.0579 1.0559 +0.19% -2.52% +1.0594 +1.0539
Euro/Sterling EURGBP= 0.9110 0.9045 +0.72% +7.76% +0.9149 +0.8989
NZ NZD= 0.6061 0.6057 +0.07% -10.02% +0.6153 +0.5945
Dollar/Dollar
Dollar/Norway NOK= 10.2773 9.9961 +2.81% +17.07% +10.3996 +9.9957
Euro/Norway EURNOK= 11.4670 11.1250 +3.07% +16.56% +11.5866 +11.1287
Dollar/Sweden SEK= 9.7362 9.7081 +0.80% +4.16% +9.8755 +9.5878
Euro/Sweden EURSEK= 10.8704 10.7840 +0.80% +3.83% +10.9964 +10.7737