* Yen falls to two-week low; franc hits one-week trough
* China says it achieved positive results in virus control
* China says to halve addition tariffs on U.S. goods
* Euro tumbles to two-month low after German data
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Recasts, adds new comment, U.S. data, FX table, updates prices, changes byline, dateline, previous
LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Feb 6 (Reuters) - The safe-haven yen and Swiss franc struggled for a fourth straight session
against the U.S. dollar on Thursday, as investors' tolerance for risk increased, encouraged by the Chinese
government's efforts to contain the latest coronavirus and limit the economic fallout.
The Japanese currency dropped to a two-week low versus the dollar, while the franc fell to its weakest
level in more than a week.
Investors also cheered news that China would cut in half the additional tariffs imposed on 1,717 U.S.
goods last year, following the signing of a Phase 1 trade deal. "A lot of the risk-off moves over the last two weeks are being unwound," said Simon Harvey, FX market
analyst at Monex Europe in London.
"We're seeing credible responses from monetary authorities, in China and it looks like it's soothing
market fears of a more entrenched slowdown in the Chinese economy," he added.
Chinese President Xi Jinping told Saudi Arabia's King Salman by telephone that China has achieved
"positive" results in its prevention and control efforts in fighting the new coronavirus, the country's
official Xinhua news agency reported on Thursday The People's Bank of China (PBOC), for its part, has pumped hundreds of billions of dollars into the
financial system this week to cushion the potentially adverse economic impact of the virus.
That said, the coronavirus has now claimed 563 lives, with more than 28,000 confirmed infections in
China. A Reuters tally also showed that 260 cases have been reported in 31 countries and regions outside
mainland China. In midmorning trading, the dollar rose 0.1% against the yen to 109.92 JPY= , and slid 0.2% versus the
franc to 0.9754 CHF=
The euro, meanwhile, tumbled to a two-month low against the dollar EUR= , weighed down by data
showing German industrial orders unexpectedly plunged in December. That suggested that the euro zone
economy would remain sluggish in the opening months of 2020.
Contracts for German goods fell 2.1% in December from November, the biggest drop since February. A
Reuters poll had forecast a 0.6% rise. The euro's losses pushed the dollar index up 0.1% to 98.432 .DXY , which benefited as well from
Thursday's solid U.S. economic data.
The number of Americans filing for unemployment benefits dropped to a nine-month low last week,
falling to 202,000 for the week ended Feb. 1. A separate report showed nonfarm productivity, which
measures hourly output per worker, increased at a 1.4% annualized rate last quarter. "The overall narrative for the U.S. economy is that it's still in a very strong position compared to
other developed markets," said Monex's Harvey.
The offshore Chinese yuan, meanwhile, was little changed against the greenback, trading at 6.9770 yuan
per dollar CNH=D3 , after weakening to 7 per dollar on Monday.
Broader market volatility fell to new lows, with one-month implied euro-dollar price swings EUR1MO=
dropping to a record low of 3.7% this week.
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Currency bid prices at 10:40 AM (1540 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.0975 $1.0997 -0.20% -2.10% +1.1013 +1.0973
Dollar/Yen JPY= 109.9400 109.8000 +0.13% +0.99% +109.9800 +109.7300
Euro/Yen EURJPY= 120.68 120.77 -0.07% -1.04% +121.0100 +120.6300
Dollar/Swiss CHF= 0.9750 0.9732 +0.18% +0.74% +0.9755 +0.9732
Sterling/Dollar GBP= 1.2945 1.3000 -0.42% -2.37% +1.3003 +1.2938
Dollar/Canadian CAD= 1.3295 1.3278 +0.13% +2.41% +1.3308 +1.3269
Australian/Doll AUD= 0.6733 0.6745 -0.18% -4.10% +0.6764 +0.6731
Euro/Swiss EURCHF= 1.0705 1.0704 +0.01% -1.35% +1.0724 +1.0704
Euro/Sterling EURGBP= 0.8479 0.8457 +0.26% +0.30% +0.8494 +0.8460
NZ NZD= 0.6455 0.6472 -0.26% -4.17% +0.6483 +0.6455
Dollar/Dollar
Dollar/Norway NOK= 9.2386 9.2102 +0.31% +5.24% +9.2454 +9.1819
Euro/Norway EURNOK= 10.1428 10.1290 +0.14% +3.08% +10.1592 +10.0979
Dollar/Sweden SEK= 9.6315 9.5839 +0.31% +3.04% +9.6376 +9.5772
Euro/Sweden EURSEK= 10.5722 10.5400 +0.31% +0.98% +10.5835 +10.5329
EURUSD and CESI https://tmsnrt.rs/2tyTER0
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