February 6, 2020 / 3:55 PM / 16 days ago

FOREX-Yen, Swiss franc fall for 4th day as investors stay risk-tolerant

    * Yen falls to two-week low; franc hits one-week trough
    * China says it achieved positive results in virus control
    * China says to halve addition tariffs on U.S. goods
    * Euro tumbles to two-month low after German data
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Recasts, adds new comment, U.S. data, FX table, updates prices, changes byline, dateline, previous
LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Feb 6 (Reuters) - The safe-haven yen and Swiss franc struggled for a fourth straight session
against the U.S. dollar on Thursday, as investors' tolerance for risk increased, encouraged by the Chinese
government's efforts to contain the latest coronavirus and limit the economic fallout.
    The Japanese currency dropped to a two-week low versus the dollar, while the franc fell to its weakest
level in more than a week. 
    Investors also cheered news that China would cut in half the additional tariffs imposed on 1,717 U.S.
goods last year, following the signing of a Phase 1 trade deal.
    "A lot of the risk-off moves over the last two weeks are being unwound," said Simon Harvey, FX market
analyst at Monex Europe in London.
    "We're seeing credible responses from monetary authorities, in China and it looks like it's soothing
market fears of a more entrenched slowdown in the Chinese economy," he added.
    Chinese President Xi Jinping told Saudi Arabia's King Salman by telephone that China has achieved
"positive" results in its prevention and control efforts in fighting the new coronavirus, the country's
official Xinhua news agency reported on Thursday 
    The People's Bank of China (PBOC), for its part, has pumped hundreds of billions of dollars into the
financial system this week to cushion the potentially adverse economic impact of the virus.
    That said, the coronavirus has now claimed 563 lives, with more than 28,000 confirmed infections in
China. A Reuters tally also showed that 260 cases have been reported in 31 countries and regions outside
mainland China.
    In midmorning trading, the dollar rose 0.1% against the yen to 109.92, and slid 0.2% versus the
franc to 0.9754
    The euro, meanwhile, tumbled to a two-month low against the dollar, weighed down by data
showing German industrial orders unexpectedly plunged in December. That suggested that the euro zone
economy would remain sluggish in the opening months of 2020.
    Contracts for German goods fell 2.1% in December from November, the biggest drop since February. A
Reuters poll had forecast a 0.6% rise.
    The euro's losses pushed the dollar index up 0.1% to 98.432, which benefited as well from
Thursday's solid U.S. economic data.
    The number of Americans filing for unemployment benefits dropped to a nine-month low last week,
falling to 202,000 for the week ended Feb. 1. A separate report showed nonfarm productivity, which
measures hourly output per worker, increased at a 1.4% annualized rate last quarter.
    "The overall narrative for the U.S. economy is that it's still in a very strong position compared to
other developed markets," said Monex's Harvey.
    The offshore Chinese yuan, meanwhile, was little changed against the greenback, trading at 6.9770 yuan
per dollar, after weakening to 7 per dollar on Monday.
    Broader market volatility fell to new lows, with one-month implied euro-dollar price swings
dropping to a record low of 3.7% this week.
    
    ========================================================
    Currency bid prices at 10:40 AM (1540 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.0975        $1.0997     -0.20%         -2.10%      +1.1013     +1.0973
 Dollar/Yen       JPY=        109.9400       109.8000    +0.13%         +0.99%      +109.9800   +109.7300
 Euro/Yen         EURJPY=     120.68         120.77      -0.07%         -1.04%      +121.0100   +120.6300
 Dollar/Swiss     CHF=        0.9750         0.9732      +0.18%         +0.74%      +0.9755     +0.9732
 Sterling/Dollar  GBP=        1.2945         1.3000      -0.42%         -2.37%      +1.3003     +1.2938
 Dollar/Canadian  CAD=        1.3295         1.3278      +0.13%         +2.41%      +1.3308     +1.3269
 Australian/Doll  AUD=        0.6733         0.6745      -0.18%         -4.10%      +0.6764     +0.6731
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0705         1.0704      +0.01%         -1.35%      +1.0724     +1.0704
 Euro/Sterling    EURGBP=     0.8479         0.8457      +0.26%         +0.30%      +0.8494     +0.8460
 NZ               NZD=        0.6455         0.6472      -0.26%         -4.17%      +0.6483     +0.6455
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.2386         9.2102      +0.31%         +5.24%      +9.2454     +9.1819
 Euro/Norway      EURNOK=     10.1428        10.1290     +0.14%         +3.08%      +10.1592    +10.0979
 Dollar/Sweden    SEK=        9.6315         9.5839      +0.31%         +3.04%      +9.6376     +9.5772
 Euro/Sweden      EURSEK=     10.5722        10.5400     +0.31%         +0.98%      +10.5835    +10.5329
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; additional reporting by Saikat Chatterjee in London; editing by
Jonathan Oatis)
  
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