* Aussie, kiwi ahead after China data beats expectations
* Yen strength shows underlying caution remains
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, April 14 (Reuters) - The dollar slipped on
Tuesday and riskier currencies rallied as China's trade data
painted a less gloomy picture than markets had feared and signs
of a slowdown in coronavirus deaths raised hopes that the worst
of the pandemic may be over.
The Australian dollar, pound and kiwi rose to month highs.
China's yuan-denominated exports in March fell a modest 3.5%
from the same period a year earlier, and imports rose 2.4%
customs data showed on Tuesday. Daily fatalities in the United States also fell sharply and
states began plans to re-open their economies. The Australian dollar AUD=D3 rose 0.7% to $0.6432, the New
Zealand dollar NZD=D3 firmed 0.6% to $0.6131 and the pound
GBP= added 0.4% to $1.2562 - their strongest since mid-March.
"The market is front-running the idea that we're going to
see the case count dissipate," said Chris Weston, head of
research at Melbourne brokerage Pepperstone.
"The baton is now being firmly handed over to the reality of
the situation in economic data," he said, calling the Chinese
figures "way better" than expected.
Dollar-denominated Chinese figures are yet to be released,
and economists polled by Reuters had forecast a 14% drop in
exports and a 9.5% fall in imports. The positive mood was reflected in equity market gains in
Asia, yet trepidation kept a cap on further rises in currencies.
MKTS/GLOB
Gold XAU= and the safe-havens of the Japanese yen and
Swiss franc also rose, in a nod to the underlying caution.
The yen JPY= held at 107.60 per dollar, a fraction softer
than a two-week peak hit on Monday. The euro EUR= recouped
overnight losses to $1.0943.
CAN IT LAST?
The Australian dollar has now run nearly 17% from a 17-year
low hit last month, and analysts are beginning to wonder if it
has run out of puff as a global recession looms.
"The traditional drivers, like commodity prices and the
world economy are going to put downward pressure back on the
Aussie," said Joe Capurso, FX analyst at the Commonwealth Bank
of Australia in Sydney.
"So it's prepped for a fall," he said. "We think it'll
oscillate around 60 cents for the next couple of months."
The kiwi has also climbed 12% from a decade low in March and
faces a dour outlook.
New Zealand's Treasury Department released a suite of five
possible scenarios for the future of the national economy on
Tuesday - all of them forecast a deep contraction in the June
quarter. "What is clear is that whatever path the global and domestic
economies follow, the effects of this recession will be severe
and long lasting," the department's report said.
That is only likely to heighten investors' nerves ahead of
the start, later on Tuesday, of a dour U.S. earnings season,
beginning with J.P. Morgan JPM.N and Wells Fargo WFC.N .
Though volatility-boosted trading earnings may deliver a
silver lining for the banks, earnings for S&P 500 firms are
expected to tumble 10.2% in the first quarter, compared with a
Jan. 1 forecast of a 6.3% rise.
(
Editing by Shri Navaratnam and Jacqueline Wong)