Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Yen, Swiss franc slide as China takes measures to limit virus impact

ForexFeb 03, 2020 03:45PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Illustration photo of a Japan Yen note

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) - The safe-haven yen and Swiss franc declined on Monday, as risk sentiment improved and fears about the coronavirus eased after China took measures to cushion the economic impact of the new epidemic and pledged to do more to contain it.

China's offshore yuan dropped to a more than seven-week low against the U.S. dollar on Monday, but trimmed its losses as New York trading got under way.

After rising to multi-week highs against the dollar last week in the face of the coronavirus scare, the yen and Swiss franc took a pause from their climb as markets cheered China's efforts.

China's central bank unexpectedly lowered interest rates on reverse repurchase agreements by 10 basis points and injected 1.2 trillion yuan ($174 billion) worth of liquidity into the markets via reverse repo operations on Monday.

Chinese authorities also pledged to use various monetary policy tools to ensure liquidity remains reasonably ample and to support firms affected by the virus epidemic.

The crisis has so far claimed 361 lives in China and 1 in the Philippines.

"There was a turnaround in risk sentiment as the sell-off in stocks and the buying of safe-havens last week were a bit overdone," said John Doyle, vice president of dealing and trading at Tempus, Inc in Washington.

"But to be honest, I don't think there was any difference on the state of the virus between Friday and Monday. I guess markets like the fact that China is being pro-active in trying to contain the virus and in easing the impact on its economy," he added.

Chinese markets still took a beating in the first trading session after an extended Lunar New Year break. The offshore yuan dropped as low as 7.023 yuan per dollar . The dollar was last up 0.2% against the Chinese currency at 7.014 yuan.

In afternoon trading, the dollar rose 0.3% against the yen to 108.67 , off a three-week low set on Friday.

The dollar also extended gains versus the yen after data showed the Institute for Supply Management's U.S. manufacturing index unexpectedly rose in January.

"With global growth stabilizing in recent months and domestic demand also starting to pick up, the ISM survey adds to the evidence that 2020 is likely to be a better year for U.S. manufacturers," said Andrew Hunter, senior U.S. economist, at Capital Economics in London.

The Swiss franc also fell against the dollar, which climbed 0.3% to 0.9660 franc .

Gains against the yen and Swiss franc pushed the dollar index up 0.4% at 97.805 (DXY).

The euro also fell 0.3% versus the dollar to $1.1062 (EUR=).

Sterling, meanwhile, tumbled after Britain laid out a tough opening stance for future talks with the European Union following its departure from the bloc last week.

Sterling was last down 1.6% at $1.3030 , retracing all of its gains following the Bank of England's decision last week to keep interest rates on hold.

Yen, Swiss franc slide as China takes measures to limit virus impact
 

Related Articles

Musk tweets, dogecoin leaps and bitcoin retreats
Musk tweets, dogecoin leaps and bitcoin retreats By Reuters - May 14, 2021 5

By Tom Wilson and Tom Westbrook LONDON/SINGAPORE (Reuters) -Bitcoin was heading on Friday for its worst week since February, while dogecoin leapt by a quarter, as the latest...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email