FOREX-Dollar near four-month high on hopes virus is stabilising

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

By Saikat Chatterjee
LONDON, Feb 12 (Reuters) - The dollar held near a four-month
high on Wednesday amid hopes the spread of the coronavirus had
slowed, with the New Zealand dollar gaining after the central
bank dropped a bias towards lowering interest rates.
Across mainland China 2,015 new cases of coronavirus were
confirmed as of Tuesday, the lowest daily rise since Jan. 30.
China's senior medical adviser also said the outbreak might be
over by April. The slowdown in the number of new cases encouraged investors
to resume seeking yields. The dollar has benefited from that
approach, thanks to its relatively high interest rates. For
example, spreads between U.S. and German 10-year bond yields are
holding at a more than two-year highs above 200 basis points.
"The steady improvement in risk appetite is helping markets,
and expectations that central banks will not rush into
tightening policy anytime soon is also boosting sentiment," said
Manuel Oliveri, an FX strategist at Credit Agricole in London.
Against a basket of major currencies .DXY , the dollar
edged 0.1% higher at 98.77, just below a four-month high of
98.95 hit in the previous session.
The coronavirus epidemic has upended China's economy, the
world's second-largest. In foreign-exchange markets,
export-oriented currencies such as the Norwegian crown NOK=
and Swedish crown SEK= have come under some pressure as the
virus spread.
The Norwegian crown has weakened more than 5% so far in
2020. Sweden's crown SEK= has fallen by 2.6%.
The New Zealand dollar NZD=D3 jumped 0.8% to $0.6462, its
biggest rise in two months, after the central bank removed the
chance of a rate cut from its forward projections. NZD/
Recession fears in Europe dragged the euro EUR= to a
four-month low overnight. It has since recovered to trade flat
at $1.0915.