FOREX-Safe-haven currencies retreat as U.S., Iran seen defusing crisis

* Yen, Swiss franc, gold slip from high
* Markets see U.S.-Iran tension easing for now
* Aussie worst performer so far this year
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Hideyuki Sano
TOKYO, Jan 9 (Reuters) - The Japanese yen and Swiss franc
retreated on Thursday as the United States and Iran backed away
from the brink of further conflict in the Middle East.
U.S. President Donald Trump responded overnight to an
Iranian attack on U.S. forces with sanctions, not violence. Iran
offered no immediate signal it would retaliate further to a Jan.
3 U.S. strike that killed one of its senior military commanders.
The yen, regarded as a safe haven in times of geopolitical
turmoil because of its deep liquidity as well as Japan's current
account surplus, quickly reversed its gains made after
Wednesday's missile strike.
The dollar traded at 109.08 yen JPY= , jumping back sharply
from a three-month low of 107.65 yen touched on Wednesday.
The Swiss franc, another safe-haven currency, also followed
a similar path.
The dollar rose to 0.9738 franc CHF= from Wednesday's low
of 0.96655 while the euro bounced off to 1.0814 franc EURCHF=R
from 21-month low of 1.07825 set on Wednesday.
Gold, often sought at time of major military conflict as an
ultimate store of value, also dropped to $1,556.10 per ounce
XAU= after hitting a seven-year high of $1,610.9.
"The targets Iran chose to attack do not seem to be of major
importance. Nor there seems to be any casualties on the U.S.
side," said Kazushige Kaida, head of foreign exchange at State
Street.
"So markets have interpreted the attack as mainly for Iran's
domestic audience. U.S. public opinion also does not support a
war with Iran. So for people like us, short-term traders, the
lesson from yesterday was that you can make money by taking
advantage of knee-jerk market reactions from news headlines and
markets could become more risk-tolerant," he said.
Traders' focus is expected to shift back to the global
economy, with expectations that the United States and China will
sign a trade deal next week providing underlying support for
risk assets.
Investors think the deal will clear one of biggest
uncertainties and help boost global growth this year, although
some think that view is too optimistic.
Given various risks -- from rising U.S. corporate debt
levels, already frothy U.S. share valuations to economic and
political uncertainties in Europe -- global growth is more
likely to be steady around 3%, rather than accelerating, said
Nouriel Roubini, CEO of Roubini Macro Associates in New York.
The euro eased to $1.1107 EUR= , flirting with its lowest
prices in almost two weeks, not helped by weak German industrial
orders data.
Industrial orders in the euro zone's biggest economy
unexpectedly fell 1.3% in November due to weak foreign demand.
The Australian dollar fetched $0.6865 AUD=D4 , having hit a
three-week low of $0.6849 on Wednesday.
Masafumi Yamamoto, chief currency strategist at Mizuho
Securities, said huge bushfires in Australia appeared to be
weighing the currency "economically and politically."
"Economic data such as car sales and job ads show damage and
Prime Minister Scott Morrison has come under criticism for his
handling and climate policy," Yamamoto said.
The Aussie is the worst performer among G10 currencies so
far this year, having fallen 2.1%.