May 1, 2020 / 2:57 PM / in a month

FOREX-Yen gains, Aussie slips as risk sentiment sours

    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Adds details, updates prices; changes byline, dateline;
previous LONDON)
    By Karen Brettell
    NEW YORK, May 1 (Reuters) - The safe haven Japanese yen
gained on Friday and riskier currencies, including the
Australian dollar, dropped as risk sentiment soured after U.S.
President Donald Trump threatened to impose new tariffs on China
over the coronavirus crisis.
    Trump said on Thursday his hard-fought trade deal with China
was now of secondary importance to the coronavirus pandemic and
he threatened new tariffs on Beijing, as his administration
crafted retaliatory measures over the outbreak.
    “U.S. President Trump soured the mood in equity markets,
raising his accusations against China about the coronavirus
outbreak, threatening new tariffs,” Action Economics said in a
report. “The yen has outperformed while commodity currencies
have underperformed amid a sharp phase of risk-off positioning.”
    The dollar fell 0.29% against the yen to 106.86 yen.
    The Australian dollar, which on Thursday reached a
seven-week high of $0.6569, dropped 1.20% to $0.6432.
    The Chinese yuan also weakened in the offshore market
to 7.1301 yuan, the most per dollar since April 2.
    "Given the scale of the COVID-19 impact, there is certainly
a high risk of geopolitical tensions escalating considerably as
lockdowns reverse," said Derek Halpenny, head of research at
MUFG.
    "This would clearly be another hit to global trade that
would add a layer of dollar support going forward," Halpenny
said.
    The euro continued to gain against the greenback, having
also rallied on Thursday on month-end repositioning.
    It was last up 0.38% at $1.0997, the highest since April 1.

    Much of Europe and Asia was closed on Friday for
International Workers' Day.
    The dollar index against a basket of currencies fell
0.31% to 98.81.
    Deutsche Bank currency strategist George Saravelos said that
if the United States imposes capital controls on China, it would
be dollar-negative as that would imply outflows from
greenback-denominated assets.
    "If the move is politically driven, it would be a clear
dollar negative in our view. It would lead to a shift in reserve
holdings out of the USD into EUR, JPY, GBP, gold and other
reserve proxies," Saravelos said.
    The greenback gained 1.11% against the Canadian dollar
 as waning risk appetite hurt-growth sensitive economies. 
    Tiff Macklem, a former senior deputy at the Bank of Canada
who has recently been a leading voice for a shift toward a
low-carbon economy, has been named to take over as governor of
the central bank, Finance Minister Bill Morneau said Friday.


    
    ========================================================
    Currency bid prices at 10:30AM (1430 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.0997        $1.0955     +0.38%         -1.90%      +1.0998     +1.0935
 Dollar/Yen       JPY=        106.8600       107.1700    -0.29%         -1.84%      +107.4000   +106.6100
 Euro/Yen         EURJPY=     117.53         117.34      +0.16%         -3.62%      +117.6500   +117.0300
 Dollar/Swiss     CHF=        0.9604         0.9652      -0.50%         -0.76%      +0.9669     +0.9606
 Sterling/Dollar  GBP=        1.2535         1.2592      -0.45%         -5.47%      +1.2600     +1.2514
 Dollar/Canadian  CAD=        1.4096         1.3941      +1.11%         +8.55%      +1.4102     +1.3931
 Australian/Doll  AUD=        0.6432         0.6510      -1.20%         -8.39%      +0.6511     +0.6427
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0564         1.0574      -0.09%         -2.67%      +1.0583     +1.0554
 Euro/Sterling    EURGBP=     0.8771         0.8696      +0.86%         +3.76%      +0.8776     +0.8693
 NZ               NZD=        0.6060         0.6124      -1.05%         -10.04%     +0.6126     +0.6056
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        10.3229        10.2414     +0.80%         +17.59%     +10.3291    +10.2391
 Euro/Norway      EURNOK=     11.3530        11.2270     +1.12%         +15.41%     +11.3560    +11.2085
 Dollar/Sweden    SEK=        9.7951         9.7562      +0.83%         +4.79%      +9.8094     +9.7494
 Euro/Sweden      EURSEK=     10.7731        10.6848     +0.83%         +2.94%      +10.7781    +10.6872
 
    

    
 (Reporting by Karen Brettell; Additional reporting by Olga
Cotaga in London; editing by Jonathan Oatis)
  
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