FILE PHOTO: South Korean won, Chinese yuan and Japanese yen notes are seen on U.S. 100 dollar notes in this picture illustration taken in Seoul, South Korea, December 15, 2015. REUTERS/Kim Hong-Ji
LONDON (Reuters) - The dollar held near a four-month high on Wednesday amid hopes the spread of the coronavirus had slowed, with the New Zealand dollar gaining after the central bank dropped a bias toward lowering interest rates.
Across mainland China 2,015 new cases of coronavirus were confirmed as of Tuesday, the lowest daily rise since Jan. 30. China’s senior medical adviser also said the outbreak might be over by April.
The slowdown in the number of new cases encouraged investors to resume seeking yields. The dollar has benefited from that approach, thanks to its relatively high interest rates. For example, spreads between U.S. and German 10-year bond yields are holding at a more than two-year highs above 200 basis points.
“The steady improvement in risk appetite is helping markets, and expectations that central banks will not rush into tightening policy anytime soon is also boosting sentiment,” said Manuel Oliveri, an FX strategist at Credit Agricole in London.
Against a basket of major currencies .DXY, the dollar edged 0.1% higher at 98.77, just below a four-month high of 98.95 hit in the previous session.
The coronavirus epidemic has upended China's economy, the world's second-largest. In foreign-exchange markets, export-oriented currencies such as the Norwegian crown NOK= and Swedish crown SEK= have come under some pressure as the virus spread.
The Norwegian crown has weakened more than 5% so far in 2020. Sweden’s crown SEK= has fallen by 2.6%.
The New Zealand dollar NZD=D3 jumped 0.8% to $0.6462, its biggest rise in two months, after the central bank removed the chance of a rate cut from its forward projections. [NZD/]
Recession fears in Europe dragged the euro EUR= to a four-month low overnight. It has since recovered to trade flat at $1.0915.
Reporting by Saikat Chatterjee; additional reporting by Tom Westbrook in Singapore; editing by Larry King
https://www.reuters.com/article/global-forex/forex-dollar-near-four-month-high-on-hopes-virus-is-stabilising-idUSL4N2AC29H
2020-02-12 08:38:00Z
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