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FOREX-Yen, Swiss franc fall for 4th day as investors stay risk-tolerant

Published 06/02/2020, 16:54
Updated 06/02/2020, 17:01
© Reuters.  FOREX-Yen, Swiss franc fall for 4th day as investors stay risk-tolerant
EUR/USD
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* 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.

========================================================

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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