Bullish indicating open at $55-$60, IPO prices at $37
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3aIRuz7 in an external browser
* Dollar benefits as investors flock to Treasuries
* Virus now spreading more quickly outside of China
* Risk aversion to remain a driver of currency markets
By Stanley White
TOKYO, Feb 27 (Reuters) - The dollar held gains against the
yen on Thursday as growing fears that a coronavirus outbreak is
turning into a pandemic boosted demand for the safety of U.S.
Treasuries.
The dollar also traded near a three-month high versus the
pound due to worries Britain's trade talks with the European
Union were stalling and dashed expectations for big fiscal
spending.
The euro, however, held up against the greenback's wider
advance as traders eyed reports that Germany's finance ministry
is considering easing fiscal spending restrictions to boost its
flagging economy.
Most currencies were locked in narrow ranges as traders
nervously monitor the global spread of the coronavirus that
emerged in China late last year.
The virus is now spreading faster outside of China than
within, stoking fears that the economic impact of travel curbs,
supply chain disruptions, and falling demand might be far
greater than previously anticipated.
"There was a question whether you should buy the dollar or
the yen as a safe haven, but the moves in Treasuries show that
more investors are choosing the dollar," said Takuya Kanda,
general manager of the research department at Gaitame.com
Research Institute in Tokyo.
"Sentiment suggests the dollar's downside is limited against
the yen. This also boost the dollar against other currencies."
The dollar was quoted at 110.35 yen JPY=EBS on Thursday in
Asia, following a 0.2% gain in the previous session.
The greenback has pulled back from a 10-month high of 112.23
yen reached on Feb. 20 but still remains above support levels,
suggesting further declines could be limited, some traders say.
By far the biggest boost for the dollar has been a massive
rally in U.S. Treasuries as worries about the virus triggered
demand for the safety of government debt.
Benchmark 10-year U.S. Treasury yields US10YT=RR fell to a
record low for the second consecutive day on Thursday, as
traders adjusted portfolios to take account of growing risks to
growth.
Investors in the dollar are also focused on the release of
U.S. durable goods orders and gross domestic product data later
on Thursday, which could test its safe-haven status if the
numbers disappoint expectations.
Efforts to contain the outbreak have paralysed large swathes
of China's economy, which are only slowly returning to normal.
There are worries that other countries could face the same
problem as the virus spreads around the world.
Some traders warn that the safe-haven status assigned to
U.S. assets is not guaranteed, and market sentiment could
quickly turn against the greenback if coronavirus infections
started rising rapidly in the United States.
The pound GBP=D3 traded at $1.2900 on Thursday, close to a
three-month low of $1.2849. Sterling also traded at 84.33 pence
per euro EURGBP=D3 , close to a two-week low.
The new round of talks between Britain and the EU is
scheduled to start on Monday, but comments from both sides
suggest their views on the scope of a fee-trade agreement differ
greatly. In addition, some investors are unwinding long positions in
cable as they scale back expectations for an expansionary fiscal
policy.
The euro EUR=D3 held steady at $1.0885 as traders pondered
how European officials would respond to a weakening economic
outlook.
Germany's government is considering suspending strict rules
on the amount of debt it can raise, the finance ministry said on
Wednesday, as it faces growing pressure to kick-start a sluggish
economy by spending more.