* Yen strengthens beyond 106 as investors look for safety
* Swiss franc rises on safe-haven bids
* Italian politics, soft global data weighs on risk appetite
* Dollar headed for biggest weekly decline since June
* GRAPHIC-World FX rates in 2019: http://tmsnrt.rs/2egbfVh
(Adds new comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 9 (Reuters) - The yen and Swiss franc gained on Friday as investors sought safe-haven
currencies due to U.S.-China trade war concerns, political uncertainty in Italy, and weak economic data
around the world.
Deep liquidity and current account surpluses in Japan and Switzerland attract safe-haven flows to
their currencies during times of geopolitical and economic stress.
"The strength of the yen will not be welcomed by the BoJ (Bank of Japan), which continues to struggle
to push Japanese CPI inflation towards its 2% goal," said Jane Foley, senior FX strategist at Rabobank in
London.
The yen soared to a seven-month high against the dollar.
"The recent escalation in trade wars between the U.S. and China suggests there is potential for robust
demand for safe-haven assets going forward and this implies ample scope for a firmer yen," she added.
The same holds true for the Swiss franc, Foley said, with the economy also in a much better budget
position than Japan.
U.S. stocks fell sharply after President Donald Trump said on Friday that he was not ready to make a
trade deal with China and had decided that the United States would not do business with Chinese telecoms
giant Huawei Technologies for the time being. Also on Friday, data showed underlying U.S. producer prices fell 0.1% in July, suggesting inflation
remained muted, and Canada's economy lost 24,200 jobs last month. In Britain, the economy shrank for the first time since 2012 in the second quarter and sterling slid
to a 31-month low against the dollar. "Take your pick. You look around the world, all the data were negative or at least concerning," said
John Doyle, vice president for dealing and trading at Tempus in Washington. "Of course, you're going to
see an uptick in the Swissie (franc) and the yen."
A sell-off in Italian bonds after the League party filed a no-confidence motion against its own
governing coalition also added to the global tension. The party's populist chief Matteo Salvini hopes that
the move will trigger early elections and install him as the new leader. The dollar weakened against a basket of currencies, pressured as Trump repeated his call for a weaker
currency to help American manufacturers.
Trump told reporters at the White House he believes the Federal Reserve needs to lower interest rates
by a full percentage point. In afternoon trading, the dollar fell 0.5% against a surging yen to 105.58 yen JPY= , after earlier
dropping to a seven-month low of 105.25. The yen posted its second weekly gain versus the U.S. dollar and
its third weekly rise versus the Australian and New Zealand dollars.
The Swiss franc rose versus the dollar and euro. The dollar was last down 0.3% at 0.9723 franc CHF= ,
while the euro slipped 0.1% at 1.0892 francs EURCHF= .
The euro rose 0.2% against the dollar to $1.1205 EUR= , showing little reaction after Salvini called
for early elections.
The dollar index .DXY dipped 0.1% slipped to 97.508 .DXY , posting its biggest weekly decline since
June 21.
Sterling fell 0.7% to $1.2050 GBP= against the dollar and 0.7% versus the euro, which rose to 92.81
pence EURGBP= , after the UK's weak data.
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Currency bid prices at 2:56 PM (1856 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1203 $1.1178 +0.22% -2.32% +1.1222 +1.1181
Dollar/Yen JPY= 105.5700 106.0600 -0.46% -4.25% +106.1100 +105.2700
Euro/Yen EURJPY= 118.30 118.58 -0.24% -6.27% +118.7200 +118.0900
Dollar/Swiss CHF= 0.9726 0.9746 -0.21% -0.90% +0.9754 +0.9710
Sterling/Dollar GBP= 1.2048 1.2131 -0.68% -5.56% +1.2153 +1.2049
Dollar/Canadian CAD= 1.3206 1.3224 -0.14% -3.16% +1.3274 +1.3204
Australian/Doll AUD= 0.6789 0.6800 -0.16% -3.69% +0.6818 +0.6780
ar
Euro/Swiss EURCHF= 1.0897 1.0897 +0.00% -3.17% +1.0913 +1.0889
Euro/Sterling EURGBP= 0.9296 0.9213 +0.90% +3.47% +0.9301 +0.9208
NZ NZD= 0.6461 0.6478 -0.26% -3.81% +0.6498 +0.6463
Dollar/Dollar
Dollar/Norway NOK= 8.8702 8.9261 -0.63% +2.68% +8.9324 +8.8504
Euro/Norway EURNOK= 9.9402 9.9797 -0.40% +0.35% +9.9955 +9.9101
Dollar/Sweden SEK= 9.5442 9.5982 -0.35% +6.47% +9.6066 +9.5257
Euro/Sweden EURSEK= 10.6946 10.7321 -0.35% +4.20% +10.7476 +10.6648
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U.S. dollar vs Japanese yen https://tmsnrt.rs/2YBD1lT
Major FX - MTD performance https://tmsnrt.rs/2YBUxqt
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