June 11, 2020 / 6:01 PM / a month ago

FOREX-Dollar, yen rise on Fed's bleak view, U.S. stock market drop

    * Yen rises to 1-month high; Swiss franc hits 3-month peak
    * U.S COVID-19 infections rise, fears of 2nd wave mount
    * U.S. jobless claims fall, producer prices rise
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Adds new comment; updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, June 11 (Reuters) - The safe-haven dollar, yen and Swiss franc gained on Thursday as U.S.
stocks fell sharply amid diminished expectations that the global economy would recover swiftly from the
coronavirus pandemic.
    The yen rose to a one-month high against the dollar, while the Swiss franc climbed to a fresh
three-month peak.
    The dollar index, though, was higher on the day, as investors sold currencies associated with
risk-taking such as the euro, sterling and the Australian dollar.
    The market took its cue from the U.S. stock market, which in early afternoon trading was down sharply.
    "This historic gain in equities is getting a reality check. There are some concerns about
re-infections, but my thought is that today is not so much different from the beginning of the week," said
John Doyle, vice president of trading and dealing at Tempus Inc. in Washington.
    "But perhaps because of how fast and how hard equities have gone up and the dollar has gone down,
traders are looking for an excuse to take profits and take them off their highs and the dollar off their
lows," he added.
    Since late May, with better-than-expected economic data and as economies and U.S. states started to
re-open, the dollar has fallen 3.5% against the currency basket.
    Safe-haven currencies earlier gained ground after the Federal Reserve issued a dire outlook on
Wednesday.
    The Fed, after a two-day meeting, signaled it plans years of extraordinary support for the U.S.
economy, which policymakers project will shrink by 6.5% in 2020, with the unemployment at 9.3%.

    Investors were also worried about new coronavirus infections as the world gradually reopened following
shutdowns aimed at curbing the spread of the disease.
    In the United States, new infections are rising slightly after five weeks of declines, according to a
Reuters analysis. Part of the increase is due to more testing, which hit a record high on June 5 of
545,690 tests in a single day but has since fallen.
    In early afternoon trading, the dollar fell 0.3% against the yen to 106.76 yen, after
earlier dropping to a one-month trough.
    The dollar also slid to a three-month low versus the Swiss franc of 0.9399 franc, and was
last down 0.3% at 0.9412 franc.
    Against a basket of currencies,, however, the dollar rose 0.4% to 96.556, led by gains versus
the euro.
    The euro dropped 0.5% to $1.1315.
    High-beta currencies heavily geared toward global growth, such as the Australian dollar and
the Norwegian crown, led losers, falling more than 1% against the dollar.
    
    ========================================================
    Currency bid prices at 1:41PM (1741 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1312        $1.1369     -0.50%         +0.91%      +1.1403     +1.1313
 Dollar/Yen       JPY=        106.7700       107.0900    -0.30%         -1.92%      +107.2300   +106.5900
 Euro/Yen         EURJPY=     120.80         121.83      -0.85%         -0.94%      +121.9000   +120.8000
 Dollar/Swiss     CHF=        0.9420         0.9444      -0.25%         -2.68%      +0.9460     +0.9377
 Sterling/Dollar  GBP=        1.2597         1.2745      -1.16%         -4.99%      +1.2754     +1.2599
 Dollar/Canadian  CAD=        1.3576         1.3411      +1.23%         +4.54%      +1.3582     +1.3398
 Australian/Doll  AUD=        0.6862         0.6997      -1.93%         -2.26%      +0.7004     +0.6864
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0658         1.0734      -0.71%         -1.79%      +1.0747     +1.0659
 Euro/Sterling    EURGBP=     0.8979         0.8921      +0.65%         +6.21%      +0.9014     +0.8921
 NZ               NZD=        0.6435         0.6538      -1.58%         -4.47%      +0.6545     +0.6437
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.5849         9.2791      +3.30%         +9.19%      +9.5849     +9.2835
 Euro/Norway      EURNOK=     10.8444        10.5640     +2.65%         +10.23%     +10.8729    +10.5659
 Dollar/Sweden    SEK=        9.3038         9.1796      +0.84%         -0.47%      +9.3054     +9.1615
 Euro/Sweden      EURSEK=     10.5277        10.4397     +0.84%         +0.55%      +10.5460    +10.4429
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Bernadette Baum and Dan Grebler)
  
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