* Yen, Swiss franc fall from multi-month highs
* Euro down vs dollar, shrugs off strong euro zone data
* China's yuan surges as traders look past Iran tensions
* U.S. data lifts dollar
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Adds new comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 7 (Reuters) - The safe-haven Japanese yen and Swiss franc pulled back from recent highs
against the dollar on Tuesday as financial markets stabilized, with investors turning more hopeful that
U.S.-Iran tensions would not escalate into an all-out war.
Better-than-expected U.S. non-manufacturing sector and factory orders data also lifted the dollar.
The yen fell from a three-month high versus the dollar, although sentiment remains fragile amid
nagging worries about the impact of the deterioration in U.S.-Iran relations.
A U.S. drone strike in Baghdad on Friday killed Iranian military commander Qassem Soleimani, widely
seen as Iran's second-most powerful figure. The Swiss franc, another safe haven, fell from four-month highs against the euro and dropped versus
the dollar.
"The big risk-off trade of last week has begun to fade and we're seeing increased appetite across the
spectrum," said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.
"You're looking at traders taking a more nuanced view of the strategic calculus between the U.S. and
Iran, and downgrading the likelihood of an escalatory cycle that damages the global economy," he added.
U.S. Secretary of Defense Mark Esper said on Tuesday Washington is seeking a diplomatic solution with
Iran but that Tehran needs to de-escalate. He added that Soleimani planned to execute an attack on U.S.
assets or interests days before he was killed. In afternoon trading, the dollar was up 0.1% against the yen at 108.53 yen JPY= , moving away from a
three-month low hit on Monday.
The Swiss franc also weakened, with the dollar up 0.3% at 0.9710 franc CHF= .
The dollar index, which fell on Monday, gained 0.4% to 97.01 .DXY , as the euro fell 0.4% to $1.1144
EUR= .
The dollar got a boost after data showed the Institute for Supply Management's non-manufacturing index
at 55 in December, up from 53.9 in November and slightly higher than market expectations. U.S. factory orders, however, fell 0.7% in November, though that was a little better than forecasts of
a 0.8% drop. That said, the dollar's performance has been mixed in recent sessions, with the slightly
better-than-expected euro zone business survey data on Monday supporting the euro.
The euro was little moved by data showing euro zone inflation accelerated in December and retail sales
were stronger than expected. Recent survey data has pointed to improving investor and
business confidence in the euro zone.
Elsewhere, the onshore yuan CNY=CFXS rose to a five-month high of 6.9315 per dollar, a sign traders
are ready to put aside concerns about a more significant confrontation between Tehran and Washington.
The United States and China are expected to sign a preliminary deal on Jan. 15 to de-escalate their
prolonged trade war.
The Australian dollar, meanwhile, was the biggest loser among G10 currencies, dropping more than 1.0%
versus the greenback to 68.65 U.S. cents AUD=D3 , as markets worried about the economic impact of deadly
bushfires ravaging the country. Currency bid prices at 3:02 PM (2002 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1144 $1.1193 -0.44% -0.59% +1.1197 +1.1134
Dollar/Yen JPY= 108.5200 108.3600 +0.15% -0.31% +108.6200 +108.2700
Euro/Yen EURJPY= 120.96 121.33 -0.30% -0.81% +121.4400 +120.7900
Dollar/Swiss CHF= 0.9707 0.9680 +0.28% +0.30% +0.9729 +0.9680
Sterling/Dollar GBP= 1.3120 1.3167 -0.36% -1.05% +1.3211 +1.3096
Dollar/Canadian CAD= 1.3001 1.2963 +0.29% +0.12% +1.3029 +1.2956
Australian/Doll AUD= 0.6868 0.6939 -1.02% -2.18% +0.6942 +0.6860
ar
Euro/Swiss EURCHF= 1.0819 1.0836 -0.16% -0.30% +1.0861 +1.0810
Euro/Sterling EURGBP= 0.8492 0.8497 -0.06% +0.45% +0.8527 +0.8467
NZ NZD= 0.6640 0.6671 -0.46% -1.43% +0.6679 +0.6626
Dollar/Dollar
Dollar/Norway NOK= 8.8544 8.7915 +0.72% +0.87% +8.8645 +8.7761
Euro/Norway EURNOK= 9.8687 9.8445 +0.25% +0.31% +9.8805 +9.8167
Dollar/Sweden SEK= 9.4496 9.3995 +0.08% +1.09% +9.4649 +9.3902
Euro/Sweden EURSEK= 10.5337 10.5252 +0.08% +0.62% +10.5591 +10.5060
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U.S. dollar vs Japanese yen https://tmsnrt.rs/36HHzak
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