* Yen rises to 1-month high; Swiss franc hits 3-month peak
* U.S COVID-19 infections rise, fears of 2nd wave mount
* U.S. jobless claims fall, producer prices rise
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Adds new comment, U.S. data, FX table, updates prices, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, June 11 (Reuters) - The safe-haven Japanese yen and Swiss franc gained on Thursday, as
expectations receded that the global economy would recover swiftly from the coronavirus pandemic after a
U.S. central bank policy meeting.
The yen rose to a one-month high against the dollar, while the Swiss franc climbed to a fresh
three-month peak.
The Fed, after a two-day meeting, signaled on Wednesday that it plans years of extraordinary support
for the U.S. economy, which policymakers project will shrink by 6.5% in 2020, and the unemployment rate
will be 9.3%. Interest rates are also expected to remain near zero until the end of 2022. Investors were also worried about new coronavirus infections as the world gradually reopened following
shutdowns aimed at curbing the spread of the disease.
Shaun Osborne, chief FX strategist, at Scotiabank in Toronto said the Fed's dire pronouncement
squashed "all over the stock market's idea of a V-shaped rebound."
He said the market was also concerned about signs of a second wave of virus infections, with a jump in
cases noted in Seoul and signs from some U.S. states that reopened earlier of an increase in new cases.
In the United States, new infections are rising slightly after five weeks of declines, according to a
Reuters analysis. Part of the increase is due to more testing, which hit a record high on June 5 of
545,690 tests in a single day but has since fallen. "With risk appetite chilled, FX markets have reverted to something more of a traditional response—the
Swiss Franc and Yen are outperforming," Osborne added.
In mid-morning trading, the dollar fell 0.5% against the yen to 106.64 yen JPY=EBS , after earlier
dropping to a one-month trough.
The dollar also slid to a three-month low versus the Swiss franc of 0.9399 franc CHF=EBS , and was
last at 0.9401 franc.
Against a basket of its rivals =USD , the dollar weakened 0.1% to 96.07.
The dollar showed little reaction following data that indicated U.S. initial jobless claims fell to a
seasonally adjusted 1.542 million for the week ended June 6, from 1.897 million the prior week. That
pulled initial claims further away from a record 6.867 million in late March. U.S. producer prices, however, were higher, up 0.4% in May, amid a surge in the cost of meat.
The euro rose, leaving open the possibility of more downside for the dollar once the dust settles. The
single currency EUR=EBS was last up 0.3% at $1.1397.
High-beta currencies heavily geared towards global growth, such as the Australian dollar AUD=D3 and
the Norwegian crown, NOK=D3 led losers in the currency space, falling more than 1% against the dollar.
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Currency bid prices at 10:33AM (1433 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1395 $1.1369 +0.23% +1.65% +1.1403 +1.1326
Dollar/Yen JPY= 106.6400 107.0900 -0.42% -2.04% +107.2300 +106.6200
Euro/Yen EURJPY= 121.52 121.83 -0.25% -0.35% +121.9000 +121.2500
Dollar/Swiss CHF= 0.9392 0.9444 -0.55% -2.96% +0.9460 +0.9396
Sterling/Dollar GBP= 1.2669 1.2745 -0.60% -4.45% +1.2754 +1.2635
Dollar/Canadian CAD= 1.3521 1.3411 +0.82% +4.12% +1.3531 +1.3398
Australian/Doll AUD= 0.6918 0.6997 -1.13% -1.47% +0.7004 +0.6882
ar
Euro/Swiss EURCHF= 1.0703 1.0734 -0.29% -1.37% +1.0747 +1.0690
Euro/Sterling EURGBP= 0.8991 0.8921 +0.78% +6.35% +0.8995 +0.8921
NZ NZD= 0.6489 0.6538 -0.75% -3.67% +0.6545 +0.6464
Dollar/Dollar
Dollar/Norway NOK= 9.4416 9.2791 +1.75% +7.55% +9.4898 +9.2835
Euro/Norway EURNOK= 10.7580 10.5640 +1.84% +9.34% +10.7694 +10.5659
Dollar/Sweden SEK= 9.1968 9.1796 +0.41% -1.61% +9.2736 +9.1615
Euro/Sweden EURSEK= 10.4822 10.4397 +0.41% +0.12% +10.5138 +10.4429
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