* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Tracking the coronavirus: https://tmsnrt.rs/3aIRuz7
* Dollar falls, then stabilises after Fed rate cut
* Central banks rushing to restore confidence in markets
* But investors fret over economic hit from coronavirus
(Adds analyst quote, details on volatility, updates prices)
By Tommy Wilkes
LONDON, March 16 (Reuters) - Japan's yen surged 2% on Monday
with traders seeking cover in safe-haven currencies as fears
about the coronavirus trumped central bank efforts to ease the
pain, while the dollar stood tall despite the U.S. Federal
Reserve slashing rates to zero.
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 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 has also
slashed rates in an emergency move.
But equity markets slumped again on Monday as traders
fretted about the growing number of coronavirus cases worldwide.
In FX, investors dumped riskier currencies and bought into
those they consider safer, although the size of the moves was
not as large as last week.
MUFG analysts said policymakers could reduce volatility, but
"the ultimate determinant will of course be evidence that
COVID-19 is peaking".
The dollar dropped 2% to as low as 105.70 yen JPY=EBS .
That was still above last Monday's 101.18 yen.
The Swiss franc, another currency considered a safe haven,
rose versus the dollar, with the dollar down 0.6% at 0.945
francs CHF=EBS . The franc was unchanged versus the euro at
1.055 francs EURCHF=EBS but near four-and-a-half-year highs.
The dollar, measured against a basket of currencies, was
last up 0.1% at 97.95 =USD , off the day's highs. It had been
falling as traders sold because of collapsing Treasury yields,
but the U.S. currency has rebounded the past week as panicked
investors stocked up on the world's most liquid currency.
The euro jumped 0.5% to $1.1168 EUR=EBS after earlier
reaching $1.124. Sterling sank as low as $1.2250 GBP=D3 , its
weakest since October.
Volatility, which had doubled in a few weeks, has subsided
in both euro/dollar EUR3MO= and across currencies .DBCVIX ,
though it remained elevated.
MORE STIMULUS
The People's Bank of China injected 100 billion yuan
($14.28 billion) into financial institutions on Monday.
The move came 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 offshore yuan rose 0.1% at 7.0206 yuan per dollar
CNH=EBS .
The Reserve Bank of New Zealand cut rates by 75 basis points
to a record 0.25%. The Reserve Bank of Australia added A$5.9
billion ($3.63 billion) to the banking system. The New Zealand NZD=D3 and Australian dollars AUD=D3
fell 0.3% but were off the day's lows.
Currencies hit hard by risk aversion, such as the Russian
rouble RUB= , Mexican peso MXN= and Norwegian crown,
EURNOK=D3 fell, in many cases towards record lows.
($1 = 1.6271 Australian dollars)
($1 = 7.0051 Chinese yuan renminbi)
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U.S. dollar vs Japanese yen https://tmsnrt.rs/2xHMtI1
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