FOREX-Aussie dollar rallies, Asian currencies lift as China heads back to work

* Anticipated re-start of Chinese production boosts mood
* AUD rises 0.5% from decade low, yuan rises 0.2%
* Caution remains as supply chain disruption shakes out
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, Feb 10 (Reuters) - Asian currencies lifted a
little on Monday amid some early signs that the spread of the
coronavirus epidemic could be slowing down and as some big
businesses resumed work in China after the Lunar New Year
holiday.
Workers began trickling back to offices and factories around
the country as the government eased some restrictions on travel
in the wake of the epidemic that has now killed more than 900
people, mostly on the mainland.
The Australian dollar AUD=D3 rose 0.5% to as high as
$0.6706, pulling away from a decade-low touched earlier in the
session. It has lost 4.5% this year.
The New Zealand dollar NZD=D3 bounced 0.1% from a
two-month low to $0.6405. The safe-haven yen JPY= softened
slightly to 109.75 yen per dollar, while bonds dipped and stock
markets pared early losses with the broad appetite for risk.
MKTS/GLOB
"We've seen positive headlines about a few large companies
all reporting that they were going to be resuming and reopening
facilities in China," said Richard Franulovich, head of FX
strategy at Westpac in Sydney.
Taiwan's Foxconn 2317.TW , a major contractor in global
technology production, received approval to resume production at
a plant in China's north, one person with knowledge of the
matter told Reuters. Carmaker Tesla's TSLA.O Shanghai factory was due resume
production on Monday, a government official said last week,
adding that authorities will provide assistance to the firm.
In further news over the weekend, the official daily update
on the number of new infections in China reported fewer than
3,000 new cases for the first time since Feb. 2.
That was tempered a little on Monday when the latest daily
number of reported new cases again topped that benchmark at
3,062, but Franulovich said that markets were for now focused on
the positive.
The Chinese yuan CNY= rose 0.2% to 6.9891 and pulled
beaten-up Asian currencies with it. CNY/
The Korean won KRW= , Thai baht THB=TH and Singapore
dollar SGD=D3 , which have all been heavily sold on virus
fears, traded firmer by mid-session. EMRG/FRX
Though plenty of caution remained, as the return to work was
subdued elsewhere and the scale supply-chain disruption only
beginning to become clear.
Kia Motors 000270.KS will suspend production at its three
car plants in South Korea due to a shortage of parts, a company
official said on Monday. A large number of workplaces remain closed and many
white-collar workers continue to work from home. On one of the
usually busiest subway lines in Beijing, trains were largely
empty.
"We're seeing some buying of AUD today, in line with some
confidence coming back as the market rolls into latter Asia
trade, but rallies are to be sold in my opinion," said Chris
Weston, head of research at Melbourne brokerage Pepperstone.
Any hints of weakness in the local labour market, or a
change of heart globally, could ramp up the chances of a rate
cut by May, currently rated at about 40%, Weston said.
"If I were trading this from the short side, I would be
adding to short positions on a close through 0.6656."