* Renewed safe-haven buying supports yen, Swiss franc
* Chilean peso rebounds after near 5-year lows on China concerns
* Aussie dollar treads water as commodities pressured
* Kiwi dollar rises after expected central bank rate increase
By Richard Leong
NEW YORK, March 12 (Reuters) - Emerging market currencies rose moderately on Wednesday, rebounding from earlier losses as investors remained nervous over China’s economy and Ukraine’s future, supporting safe-haven demand for the yen and the Swiss franc.
Relative resilience in the euro and dollar signalled an unwillingness to turn defensive, and most developed and emerging market currencies traded in narrow ranges, analysts said.
“People are reluctant to make big bets right now,” said Marc Chandler, chief global currency strategist at Brown Brothers Harriman & Co in New York. “People are just reducing their short position in emerging market exposure.”
China’s first domestic bond default last week fed fears about slowing growth in the world’s second-biggest economy and its demand for copper and other raw materials. This has pummelled the Australian dollar, Chilean peso, the South African rand and other currencies tied to commodity prices.
The diplomatic stalemate between Russia and the West over Ukraine and military moves by both sides have led investors to further cut their exposure to riskier currencies, analysts said.
“China has been a concern with its economic data which have been on the softer side. We have been weak with commodity currencies so far this week,” said Dean Popplewell, chief currency strategist at Oanda in Toronto.
The Aussie dollar, the Chilean peso, and South Africa’s rand, which are usually correlated to the prices of iron, copper and other raw materials, fell in overnight trading before staging a comeback as Wall Street stocks retraced much of their initial losses.
The Chilean peso fell to near five-year lows on a deepening selloff in copper in Asian trading. Chile, a major copper exporter, saw its currency rise 0.5 percent versus the dollar at 572.08 pesos, reducing its month-to-date loss to 2.4 percent.
The Aussie gained 0.2 percent, while the rand rose 0.2 percent.
Copper prices in Shanghai fell five percent overnight. London prices were close to their lowest in more than three years. A fourth day of losses in copper compounded investors’ anxiety, underpinned by the ongoing tension in Ukraine.
“Everything is on a knife’s edge with the political situation there,” Popplewell said.
Dealers said the rouble was propped up by central bank support as Russian stock indexes fell again on Wednesday, reacting to the growing chance of Western sanctions over Crimea.
The rouble slipped 0.1 percent against the dollar at 36.49 roubles, within striking distance of the record low of 36.675 set on March 3 after Russian President Vladimir Putin moved troops into the Crimea.
Concern about China and Ukraine has been a net positive for the yen, a safe haven in times of economic stress, but had little visible impact on other major currencies.
The yen, steadier so far this year after losing a fifth of its value against the dollar in 2013, was up 0.3 percent against the dollar at 102.70 yen. Versus the euro, it was at 142.79 yen.
The Swiss franc, another safe-haven currency, strengthened 0.5 percent against the dollar and 0.2 percent versus the euro at 0.8739 franc and 1.2152 franc, respectively.
“If there’s any dominant theme, it’s one of ‘risk-off,’ given the concern over the slowdown in China and its financial problems,” said Daragh Maher, a strategist with HSBC in London. “The next break in that might not come until we see more Chinese numbers tomorrow.”
Chinese industrial output, investment and retail sales figures are all due at 0530 GMT on Thursday.
After a widely expected rise in New Zealand interest rates on Thursday, the New Zealand dollar rose 0.4 percent to 0.8505 to the greenback, near the four-plus month high set last week.
The Reserve Bank of New Zealand as expected lifted interest rates and signalled more increases are likely to return them to levels which are not longer stimulative as its economy gained momentum.
The Reserve Bank of New Zealand raised its policy rate by 25 basis points to 2.75 percent after holding it at a record low for three years.