* Yen, Swiss franc fall from multi-month highs
* Euro pushed lower on dlr strength, shrugs off inflation 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, FX table, U.S. data, updates prices, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 7 (Reuters) - The safe-haven yen and Swiss franc pulled back from recent highs against
the dollar on Tuesday as financial markets stabilized, with investors turning more hopeful that tensions
between the United States and Iran 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.
"There's a mild de-escalation of U.S.-Iran tensions," said Erik Bregar, director and head of FX
strategy at Exchange Bank of Canada in Toronto. "That's evident by seeing gold and oil off their Sunday
highs. But it's not over in terms of war-rhetoric."
In late morning trading, the dollar was slightly higher against the yen at 108.44 yen JPY= , moving
away from a three-month low hit on Monday.
The Swiss franc also weakened, with the dollar up 0.4% at 0.9717 franc CHF= .
The dollar index, which fell on Monday, gained 0.3% to 96.99 .DXY , as the euro fell 0.4% to $1.1147
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 inflation in the zone 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 in the currency market, the onshore yuan CNY=CFXS rose to a five-month high of 6.9315 per
dollar - a sign that traders are ready to put aside concerns about a more significant confrontation
between Tehran and Washington.
The offshore yuan gained 0.5% to 6.9293 yuan per dollar CNH= , its highest since Dec. 13.
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 the G10 currencies, dropping 1.0% versus
the greenback to 68.72 U.S. cents AUD=D3 , as markets worried about the economic impact of deadly
bushfires ravaging the country. Currency bid prices at 10:21 AM (1521 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1141 $1.1193 -0.46% -0.62% +1.1197 +1.1142
Dollar/Yen JPY= 108.4400 108.3600 +0.07% -0.39% +108.5000 +108.2700
Euro/Yen EURJPY= 120.83 121.33 -0.41% -0.92% +121.4400 +120.8100
Dollar/Swiss CHF= 0.9714 0.9680 +0.35% +0.37% +0.9722 +0.9680
Sterling/Dollar GBP= 1.3107 1.3167 -0.46% -1.15% +1.3211 +1.3096
Dollar/Canadian CAD= 1.3013 1.2963 +0.39% +0.21% +1.3023 +1.2956
Australian/Doll AUD= 0.6864 0.6939 -1.08% -2.24% +0.6942 +0.6864
ar
Euro/Swiss EURCHF= 1.0826 1.0836 -0.09% -0.24% +1.0861 +1.0827
Euro/Sterling EURGBP= 0.8499 0.8497 +0.02% +0.53% +0.8527 +0.8467
NZ NZD= 0.6626 0.6671 -0.67% -1.63% +0.6679 +0.6627
Dollar/Dollar
Dollar/Norway NOK= 8.8547 8.7915 +0.72% +0.87% +8.8633 +8.7761
Euro/Norway EURNOK= 9.8657 9.8445 +0.22% +0.28% +9.8805 +9.8167
Dollar/Sweden SEK= 9.4584 9.3995 +0.13% +1.19% +9.4649 +9.3902
Euro/Sweden EURSEK= 10.5384 10.5252 +0.13% +0.66% +10.5591 +10.5060
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U.S. dollar vs Japanese yen https://tmsnrt.rs/36HHzak
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