* Investors shake off China virus worries
* Sterling gains further as BoE rate-cut fears recede
(Recasts, updates rates, adds comments from after open of U.S.
market; new byline, dateline; previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Jan 22 (Reuters) - The U.S. dollar edged lower on
Wednesday and the Japanese yen and the Swiss franc slipped amid
muted demand for safe haven units as updates from China about
the spread of a new flu-like coronavirus raised hopes the
outbreak would be contained.
The dollar index .DXY , which measures the greenback
against six other major currencies, was down 0.03% at 97.506.
Deaths from China's new flu-like virus rose to nine on
Wednesday, with more than 470 confirmed cases, heightening
global fears of contagion from an infection suspected to have
come from animals. But China's response and candor - in contrast to how it
handled the 2002-03 Severe Acute Respiratory Syndrome (SARS)
epidemic - helped reassure investors concerned about the
possible global fallout.
"The virus concern is settling down a bit overnight as the
market is getting a little more transparency around the issue
from China and other nations than they did with SARS for
example," Brad Bechtel, managing director, Jefferies in New
York, said in a note.
Against the safe-haven yen and the Swiss franc, which tend
to draw investors during times of geopolitical or financial
stress, the dollar was moderately stronger on the day.
The dollar was 0.04% higher against the Japanese currency,
and up 0.08% against the franc.
"Doesn't mean we are out of the woods on this issue just yet
as I still expect a steady drone of negative headlines until we
truly have everything contained but for now things have
settled," he said.
The franc was pressured this week after data indicated the
country's central bank had stepped up its intervention in the
market to stop its currency from appreciating.
The Swiss National Bank, which has had an interventionist
approach to the franc as it struggles to boost inflation in the
highly export-oriented economy, declines to talk about its
currency management policy. However, investors use weekly sight
deposit data as a proxy to estimate how active it has been in
the currency markets.
Data published on Monday showed an increase in the amount of
cash that domestic commercial banks hold with the Swiss National
Bank. Britain's pound rose 0.67% against the dollar as investors
debated whether or not the Bank of England would cut interest
rates when it meets next week. The Canadian dollar was down 0.4% against the greenback
after the Bank of Canada maintained its key overnight interest
rate at 1.75% as expected on Wednesday, but opened the door to a
possible cut should a slowdown in growth drag on.
Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>