* China cuts U.S. import tariffs
* Yuan hits highest since Lunar New Year break
* Aussie rises, yen softens
* U.S. dollar at two-month high after strong data
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Feb 6 (Reuters) - The Australian dollar and
Chinese yuan rose on Thursday after China unexpectedly said it
would halve tariffs on some U.S. imports, a goodwill gesture
that added to hopes the global economy may be able to avoid a
major shock from a virus outbeak.
China said on Thursday that the cuts apply from 0501 GMT on
Valentine's Day, Feb. 14 and that it hopes to work with the
United States to eliminate all tariff increases in future.
That came with investors already beginning to emerge from
safe-haven assets and bet on the virus being a short-term shock,
even while the human toll continued to grow. MKTS/GLOB
"Any news along these lines is good news," said Robert
Rennie, head of markets strategy at Westpac in Sydney.
"It adds to the sense that there's a number of policies both
domestically and globally which could help to mitigate the
impact of coronavirus," he said, while adding its actual
efficacy may be limited because of the expected hit to demand.
The yuan CNY= advanced 0.2% to 6.9601 per dollar, its
highest since Jan. 23, while the Australian dollar AUD=D3 rose
by the same margin to $0.6759. The Korean won jumped half a
percent KRW= .
All had been heavily sold in favour of safer currencies such
as the Japanese yen in recent weeks as investors scrambled to
price in a sharp economic slowdown in China.
The yen on Thursday slipped to a two-week low of 109.95 per
dollar JPY= .
The death toll from the coronavirus in mainland China rose
by 75 on Thursday, its third consecutive record daily rise.
Infections stand at 28,018.
Yet with more than 99% of them in China and hundreds of
experts set to gather in Geneva next week to devise plans to
combat the virus, investors have seemingly gravitated away from
the more dire views about the epidemic's impact on global
growth.
Chinese authorities have also pumped in billion of dollars
into money markets this week in an effort to restore calm, and
have pledged to do more to support the economy.
Overnight the S&P 500 .SPX made a fresh record closing
high and Asian equity markets extended their rally on Thursday.
Firm U.S. private payrolls, which posted their biggest jump
in nearly four years, drove the dollar to a two-month high
against a basket of its peers .DXY . The greenback extended gains against the pound in Asian
trade, gaining 0.1% to $1.2977 per pound, while sitting only a
fraction below a two-month high against the euro EUR= at
$1.0996.
"This is a market that was just wanting to go higher, it
just needs a reason," said Chris Weston, head of research at
Melbourne brokerage Pepperstone.
"It's like a jack-in-the-box, with a lid that is just
waiting to spring up," he said.
Though that is not to say caution is absent. Many
risk-sensitive assets are still trading at substantial discounts
to their prices of a few weeks ago.
The virus has disrupted air travel, driven holiday
cancellations, factory closures and production cuts leading most
economists to make deep downgrades to their China growth
forecasts.
Oil prices are rising, but the recovery is much slower than
the selldown as the size of the expected hit to demand grows.
"Places where the optimism isn't being felt include Thailand
and Singapore, with room for easier monetary policy being
explored," said Kit Juckes, an analyst at Societe Generale.
The Thai baht THB=TH has shed about 2% since Jan. 20 and
stayed soft on Thursday, while the Singapore dollar SGD=
extended its slide having suffered its steepest drop in two
years on Wednesday after the central bank flagged room for the
currency to ease amid the virus fallout. EMRG/FX