January 21, 2020 / 2:41 PM / a month ago

FOREX-Yuan weakens, safe havens gain on Chinese virus concerns

    * Pneumonia-like virus in China hurts risk appetite
    * Euro gains before ECB, as data beats expectations
    * Sterling up after strong jobs report

 (New throughout, updates prices, market activity and comments
to U.S. market open, new byline, changes dateline, previous
LONDON)
    By Karen Brettell
    NEW YORK, Jan 21 (Reuters) - China's yuan tumbled on Tuesday
and safe-haven currencies rallied as the spread of a
pneumonia-like virus in China dampened risk appetite.
    China reported a fourth death from a new coronavirus as the
number of cases continued to rise, just as hundreds of millions
of Chinese prepared to travel for the Lunar New Year holiday.

    Global stocks fell as the outbreak rekindled memories of the
severe acute respiratory syndrome (SARS) in 2002-2003, another
coronavirus which broke out in China and killed nearly 800
people in a global pandemic.
    "You've got a stronger yen, a stronger Swiss franc and risk
aversion is setting in across everything," said Kit Juckes, an
analyst at Societe Generale.
    The dollar was last up 0.54% against the offshore yuan at
6.904 per dollar.
    Currencies linked to Chinese trade and tourism also dropped.
The Australian dollar touched its lowest in over a month
at $0.6842, before rebounding to $0.6867, down 0.07% on the day.
    The dollar weakened 0.10% against the Japanese yen to
110.07 per dollar and was down 0.06% against the Swiss franc
 at 0.9673 per dollar.
    The Bank of Japan earlier nudged up its economic growth
forecasts and was cautiously optimistic about the global
outlook, though it said ongoing risks meant it was far too soon
to consider scaling down its massive stimulus program.

    The euro gained against the dollar as better than expected
data in the region overcame any safety bid for the greenback.
    A survey from Germany's ZEW research institute showed that
the mood among German investors brightened far more than
expected in January.
    The single currency was also supported by expectations that
the European Central Bank will offer a brighter view of the
economy when it meets on Thursday.
    “We could see a little bit more cautious optimism there,
that’s getting people a little bit more excited about the euro,”
said Mazen Issa, senior FX strategist at TD Securities in New
York.
    The euro gained 0.15% to $1.1111.
    Sterling benefited from news that Britain's economy created
jobs at its fastest rate in nearly a year in the three months to
November, potentially undermining the case for a Bank of England
interest rate cut next week.
    The pound was last up 0.42% at $1.3063.
    
    ========================================================
    Currency bid prices at 9:20AM (1420 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1111        $1.1094     +0.15%         -0.88%      +1.1118     +1.1086
 Dollar/Yen       JPY=        110.0700       110.1800    -0.10%         +1.11%      +110.2100   +109.9000
 Euro/Yen         EURJPY=     122.32         122.23      +0.07%         +0.30%      +122.3600   +121.8700
 Dollar/Swiss     CHF=        0.9673         0.9679      -0.06%         -0.05%      +0.9689     +0.9662
 Sterling/Dollar  GBP=        1.3063         1.3009      +0.42%         -1.48%      +1.3083     +1.2996
 Dollar/Canadian  CAD=        1.3054         1.3046      +0.06%         +0.52%      +1.3077     +1.3044
 Australian/Doll  AUD=        0.6867         0.6872      -0.07%         -2.19%      +0.6880     +0.6845
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0749         1.0741      +0.07%         -0.95%      +1.0750     +1.0732
 Euro/Sterling    EURGBP=     0.8505         0.8526      -0.25%         +0.60%      +0.8535     +0.8498
 NZ               NZD=        0.6607         0.6606      +0.02%         -1.89%      +0.6615     +0.6589
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.9406         8.9256      +0.17%         +1.85%      +8.9675     +8.9241
 Euro/Norway      EURNOK=     9.9353         9.9033      +0.32%         +0.98%      +9.9435     +9.9034
 Dollar/Sweden    SEK=        9.4974         9.5145      -0.05%         +1.60%      +9.5387     +9.4907
 Euro/Sweden      EURSEK=     10.5545        10.5599     -0.05%         +0.81%      +10.5760    +10.5502
 

 (Additional reporting by Dhara Ranasinghe in London
Editing by Nick Zieminski)
  
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