March 25, 2019 / 3:16 PM / 4 months ago

FOREX-Euro rises as German business survey pares recession fears

    * Euro gets a boost as IFO survey data beats forecast 
    * Yen recedes from six-week highs vs dollar 
    * U.S. yield curve stays mildly inverted for second session
    * Graphic: World FX rates in 2019

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, March 25 (Reuters) - The euro firmed on Monday as
a stronger-than-forecast German business confidence survey
allayed some fears about a recession and pulled the safe-haven
yen from a six-week high against the dollar. 
    Financial markets around the globe were roiled on Friday, 
stemming from anxiety about an economic downturn after the U.S.
yield curve inverted, with the 10-year yield dropping below the 
three-month bill rate. Those fears stoked a dumping of stocks
and other growth-oriented assets and a rush into the yen, gold,
U.S. and German government debt and other perceived low-risk
    A yield curve inversion has preceded every U.S. recession in
the past 50 years.
    "On Friday we were looking into the abyss," said Marc
Chandler, chief market strategist at Bannockburn Global Forex
LLC in New York. "Today we are taking a step back."
    Trader sentiment stabilized after Germany's IFO Institute
said its business climate index rose to 99.6, beating a
consensus forecast for a reading of 98.5 and following six
consecutive drops.
    As the data briefly lifted German 10-year yields
back into positive territory and helped European shares, the
single currency also benefited, rising 0.2 percent to a
session-high of $1.13265.
    Against the yen, the single currency surged 0.46 percent to
a high of 124.81, having traded as low as 123.875
    It is unclear whether the mild bounce in the euro and
emerging market currencies will be sustained as traders remain
wary with the U.S. yield curve inversion persisting for a second
trading session, analysts said.
    "I wouldn't say the dash for safe assets is over. The tone
of general risk-off sentiment will prevail for a while but not
to the same extent (as Friday)," Commerzbank strategist Ulrich
Leuchtmann said, noting a recession was unlikely in the near
term in the euro zone or the United States. 
    As for the greenback, it was 0.13 percent lower against a
basket of currencies. It did not react much to U.S.
Attorney General William Barr's announcement that U.S. Special
Counsel Robert Mueller found no evidence of collusion between
Russia and President Donald Trump's 2016 election campaign team.

    The easing growth concerns boosted the growth-reliant
Australian and New Zealand dollars by about 0.3 percent versus
the greenback. 
    The British pound recovered from earlier losses against the
dollar and euro as the UK parliament
prepared to try and wrest control of the Brexit process in a
series of votes planned for later in the day.
    Currency bid prices at 10:40AM (1440 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1320        $1.1312     +0.07%         -1.30%      +1.1328     +1.1285
 Dollar/Yen       JPY=        110.0100       109.9100    +0.09%         -0.23%      +110.2300   +109.7200
 Euro/Yen         EURJPY=     124.52         124.21      +0.25%         -1.33%      +124.8100   +123.9000
 Dollar/Swiss     CHF=        0.9923         0.9935      -0.12%         +1.11%      +0.9949     +0.9921
 Sterling/Dollar  GBP=        1.3221         1.3209      +0.09%         +3.65%      +1.3245     +1.3161
 Dollar/Canadian  CAD=        1.3431         1.3424      +0.05%         -1.51%      +1.3444     +1.3404
 Australian/Doll  AUD=        0.7102         0.7082      +0.28%         +0.75%      +0.7109     +0.7066
 Euro/Swiss       EURCHF=     1.1235         1.1228      +0.06%         -0.17%      +1.1256     +1.1223
 Euro/Sterling    EURGBP=     0.8559         0.8555      +0.05%         -4.72%      +0.8598     +0.8543
 NZ               NZD=        0.6900         0.6875      +0.36%         +2.72%      +0.6902     +0.6872
 Dollar/Norway    NOK=        8.5423         8.5537      -0.13%         -1.12%      +8.5745     +8.5155
 Euro/Norway      EURNOK=     9.6711         9.6707      +0.00%         -2.37%      +9.6853     +9.6384
 Dollar/Sweden    SEK=        9.2306         9.2703      -0.30%         +2.98%      +9.2845     +9.2133
 Euro/Sweden      EURSEK=     10.4480        10.4792     -0.30%         +1.80%      +10.4826    +10.4280

 (Additional reporting by Sujata Rao in LONDON
Editing by Mark Heinrich and Andrea Ricci)
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