February 13, 2020 / 2:42 PM / in 11 days

FOREX-Euro sinks against dollar as U.S. assets look more attractive

    * Euro lowest since May 2017 against dollar
    * Rise in coronavirus cases boosts dollar, yen
    * Central banks expected to hold rates low

 (New throughout, updates prices, market activity and comments
to U.S. market open, new byline, changes dateline, previous
LONDON)
    By Karen Brettell
    NEW YORK, Feb 13 (Reuters) - The euro plunged to more than
two-year lows against the dollar on Thursday as concerns about a
sharp rise in the number of new cases of the coronavirus
outbreak in China led investors to seek out U.S. assets.
    The United States is expected to weather the economic impact
of the virus better than the eurozone.
    The death toll in China's Hubei province from the 
coronavirus outbreak leapt by a record 242 on Thursday to 1,310,
with a sharp rise in confirmed cases after the adoption of new
methodology for diagnosis, health officials said.
    “Europe, and Germany in particular, have very strong trade
linkages to Asian markets, and specifically with China,” said
Mazen Issa, senior FX strategist at TD Securities in New York.
“Coming into the year expectations were for a moderate growth
rebound. While it did seem reasonable at the time, the
disruptions are going to delay that narrative.”
    The euro dropped to $1.0848, the lowest since May
2017. It breached technical support at the October low of
$1.0877 on Wednesday. That leaves the currency vulnerable to
further losses, analysts said.
    The single currency also dropped against the safe haven
Swiss franc to 1.0617 francs, its lowest level since
August 2015.
    The Japanese yen gained against the dollar on
Thursday to 109.79 yen.
    The greenback has benefited against the euro from a popular
carry trade, where investors borrow in low-yielding currencies
such as the euro and invest in dollars or other higher-yielding
currencies.
    Expectations that central banks will hold rates low, and may
provide more accommodation if the coronavirus harms the global
economy, is supporting risk appetite and may reduce the
likelihood of a sharp selloff in stocks.
    “The perspective is that rates will remain low, and that is
cushioning some of the downside on the equity side,” said Issa.
    Stocks slipped on Thursday after setting a record closing
high every day of this week.
    U.S. data on Thursday showed that U.S. underlying consumer
prices picked up in January as households paid more for rents
and clothing, supporting the Federal Reserve's contention that
inflation would gradually rise toward its 2% target.
    
    
    ========================================================
    Currency bid prices at 9:16AM (1416 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.0847        $1.0871     -0.22%         -3.24%      +1.0888     +1.0848
 Dollar/Yen       JPY=        109.7900       110.0800    -0.26%         +0.85%      +110.0900   +109.6300
 Euro/Yen         EURJPY=     119.12         119.69      -0.48%         -2.32%      +119.7200   +119.0600
 Dollar/Swiss     CHF=        0.9789         0.9781      +0.08%         +1.15%      +0.9795     +0.9761
 Sterling/Dollar  GBP=        1.3018         1.2960      +0.45%         -1.82%      +1.3045     +1.2945
 Dollar/Canadian  CAD=        1.3242         1.3249      -0.05%         +1.98%      +1.3270     +1.3240
 Australian/Doll  AUD=        0.6735         0.6737      -0.03%         -4.07%      +0.6738     +0.6708
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0620         1.0636      -0.15%         -2.14%      +1.0639     +1.0620
 Euro/Sterling    EURGBP=     0.8332         0.8388      -0.67%         -1.44%      +0.8399     +0.8327
 NZ               NZD=        0.6454         0.6463      -0.14%         -4.19%      +0.6466     +0.6429
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.2465         9.2236      +0.25%         +5.33%      +9.2766     +9.2263
 Euro/Norway      EURNOK=     10.0314        10.0304     +0.01%         +1.97%      +10.0949    +10.0320
 Dollar/Sweden    SEK=        9.6588         9.6302      +0.06%         +3.33%      +9.6615     +9.6282
 Euro/Sweden      EURSEK=     10.4799        10.4731     +0.06%         +0.10%      +10.5022    +10.4753
 
    
    

  
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