FOREX-Swiss franc holds gains versus dollar on U.S.-Iran risk

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Safe-haven Swiss franc up on rising Mideast tensions
* Yen pulls back from three-month high but mood is cautious
* Gold surges to highest since 2013

By Stanley White
TOKYO, Jan 7 (Reuters) - The Swiss franc held gains against
the dollar on Tuesday as traders sought save-havens amid
heightened anxiety about potential Iranian retaliation to a U.S.
drone strike that killed its most prominent military commander
last week.
The yen, another safe-haven currency, pulled back from a
three-month high versus the dollar, but sentiment remains
fragile due to the increasing worries about armed conflict
between the United States and Iran.
Highlighting the concerns, the U.S. currency nursed losses
against sterling and the euro as the emergence of a new
geopolitical flashpoint led some investors to reassess their
tolerance for risk at the start of the new year.
"Sentiment clearly favours risk-off trades, but dollar/yen
is not falling much because Japanese importers are buying," said
Yukio Ishizuki, foreign exchange strategist at Daiwa Securities
in Tokyo.
"Excluding this real demand, the dollar is weak against
other currencies. This reflects the situation in the Mid-East,
but we need to see what happens next."
Against the dollar, the Swiss franc CHF=EBS was quoted at
0.9679 following a 0.5% jump on Monday toward its highest level
in more than a year.
The yen JPY=EBS was steady at 108.42 per dollar, off a
three-month high of 107.77 touched on Monday.
The dollar index .DXY against a basket of six major
currencies stood at 96.623, following a 0.2% decline on Monday.
The United States has no plans to pull its troops out of
Iraq, Defense Secretary Mark Esper said on Monday, following
reports by Reuters and other media of a U.S. military letter
informing Iraq officials about the repositioning of troops in
preparation to leave. This came after Friday's drone strike in Baghdad ordered by
U.S. President Donald Trump that killed Iranian military
commander Qassem Soleimani, widely seen as Iran's second most
powerful figure behind Supreme Leader Ayatollah Ali Khamenei.
The U.S. government says Soleimani was actively developing
plans to attack U.S. interests in Iraq and the Middle East.
Iran's leaders have promised to avenge the killing. The United States and Iran, or its proxies, have clashed in
some form or another for decades over political and military
influence in the Middle East.
Elsewhere in the currency market, the pound GDP=D3 traded
at $1.3170, following a 0.7% jump on Monday. The euro EUR=D3
was quoted at $1.1196 after a 0.4% gain in the previous session.
Spot gold XAU= , another safe-haven asset, traded at
$1,564.16 per ounce, just below a near seven-year high of
$1,579.72 reached on Monday. GOL/
Investors await data due later Tuesday on the U.S. trade
balance, factory orders, and the services sector to measure the
health of the world's largest economy.
The United States and China are expected to sign a
preliminary deal on Jan. 15 to de-escalate a prolonged trade
war, but rising geopolitical risks threaten to overshadow the
benefits of reduced trade friction.