FOREX-Dollar soaks up gains in choppy market, sentiment still fragile

* Dollar gains vs yen and euro
* Risk-sensitive Aussie hits 11-year low
* Coronavirus fears keep markets on edge

By Hideyuki Sano
TOKYO, March 17 (Reuters) - The dollar recouped lost ground
on the yen and extended gains against risk currencies on
Tuesday, in a choppy trading session that underlined fragile
confidence in frazzled markets.
Market liquidity was tight and investors remained nervous
after coordinated moves by central banks had spectacularly
failed to quell trepidation over the coronavirus pandemic.
The dollar rose 0.8% to 106.69 yen JPY= and gained on the
euro, pound, as well as the Australian and New Zealand
counterparts and most emerging markets' currencies.
Investors and businesses are scrambling for dollars as the
outlook grows darker by the day. China has reported a fresh rise
in cases. Malaysia is preparing to enter lockdown amid ever
tighter measures in Europe and the United States.
Adding to jitters, the Philippines closed its stock market
and suspended trade in bonds and currencies. Currency trade is
set to resume tomorrow, with the other markets indefinitely shut
in a reminder of the risks to liquidity.
"Liquidity is even worse compared with yesterday. Even the
gold has been sold sharply," said Kazushige Kaida head of forex
at State Street Bank in Tokyo.
"This is a world I have never seen before. This crisis is
more incomprehensible than previous crises like the tech bubble
burst (in 2000) and the LTCM crisis (in 1998)."
The Australian dollar AUD=D3 , seen as sensitive to global
growth due to the country's link to commodities, fell 0.7% to a
fresh 11-year low of $0.6065.
The British pound is also under pressure, dogged by worries
about not only Britain's exit from the European Union but also
its sizable current account deficit.
Sterling traded at $1.2222 GBP=D4 , down 0.4% and near a
five-month low of $1.2203 hit in the previous session.
Investors are also shunning many emerging market currencies.
MSCI emerging market currency index .MIEM00000CUS dropped
0.2%, staying at its lowest level since late 2018. The Korean
won KRW= hit its lowest since 2010. EMRG/FRX
A rout on Wall Street on Monday stemming from fears over the
coronavirus crisis in the West trumped the Federal Reserve's
emergency move to slash rates on Sunday. Investors took the Fed action, joined by central banks in
Japan, Australia, New Zealand and elsewhere, as insufficient
given the pathogen's breakneck spread across the world which has
put many nations on virtual lockdowns.
Some analysts said the hasty moves may have backfired as
investors were spooked over the possible panic among
policymakers.
"Central banks are pressing the gas pedal to the floor. But
the car is bogged down in a quagmire that is called coronavirus,
so it won't move forward," said Ayako Sera, market strategist at
Sumitomo Mitsui Trust Bank.
"Until the outbreak stops, for investors, it is time for
patience," she said.
There is no clarity on that front, with global cases now
rising to 174,100 with 6,700 deaths, prompting countries to shut
borders and take increasingly drastic measures to try to reduce
the severity of the outbreak.