* China unveils interest rate reform, boosts risk appetite
* Focus on Fed's Jackson Hole symposium
* Markets expect monetary leaders to announce key measures
* Graphic: World FX rates in 2019
(Updates prices, adds comment)
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 19 (Reuters) - The safe-haven yen and Swiss franc
retreated against the dollar on Monday, as risk sentiment improved
after a week of turmoil on hopes major central banks would launch
fresh stimulus measures to lift their sluggish economies.
The Japanese currency fell for a third straight session versus the
greenback, while the Swiss unit slid to a two-week low against the dollar.
Optimism about government action to calm U.S. recession concerns,
triggered by last week's inversion of the bond yield curve, grew ahead
of the Federal Reserve's symposium later in the week in Jackson Hole,
Wyoming, where analysts said central bankers could announce new
China also unveiled interest rate reforms expected to lower
corporate borrowing costs, which helped lift the market's mood, while
the prospect of Germany's coalition government ditching its balanced
budget rule to take on new debt and launch stimulus steps also boosted
"We think the more accommodative central bank backdrop should
help insulate the downside in risk markets," said Mazen Issa,
senior FX strategist at TD Securities in New York.
In afternoon trading, the dollar rose 0.3% against the yen to
106.66 yen , helping push the dollar index 0.2% higher on the day to
Scotiabank, in a research note, said the dollar/yen pair is
showing signs of stabilizing from a technical viewpoint, but the
longer-run indicators remain bearishly aligned for the greenback.
"We would prefer to see additional dollar gains through the
close of this week to confirm last week's reversal and think a daily
close above 106.80 yen... would support the outlook for dollar
strength," the bank said.
The euro, meanwhile, fell 0.1% versus the greenback at $1.1079 ,
after falling 1% last week, its biggest weekly drop since early July.
Against the Swiss franc, the dollar climbed 0.3% to 0.9816 franc
. Sight deposits at the Swiss National Bank posted another big weekly
rise, indicating more intervention from policymakers.
Investor optimism is likely to be capped before a speech by Fed
Chairman Jerome Powell later this week at the Jackson Hole conference.
Strategists believe his comments will be aimed at reassuring
nervous markets that the Fed will remain in an easing stance and set
the stage for more rate cuts after a quarter-percentage-point rate cut
"The Jackson Hole summit would be the perfect venue for the
Fed to set or reset market expectations," said Kathy Lien,
managing director of FX strategy at BK Asset Management.
"If they're committed to lowering interest rates in
September, we should hear central bankers downplay the improvement in
spending and retail sales."
Money markets are pricing in a cumulative 67 basis points of rate
cuts from the Fed by the end of the year.
Currency bid prices at 3:53PM (1953 GMT)
Description RIC Last U.S. Close Pct Change
YTD Pct High Bid Low Bid
Euro/Dollar EUR= $1.1077 $1.1089 -0.11%
-3.42% +1.1113 +1.1077
Dollar/Yen JPY= 106.6500 106.3600 +0.27%
-3.27% +106.6900 +106.2500
Euro/Yen EURJPY= 118.14 117.96 +0.15%
-6.40% +118.4700 +117.8700
Dollar/Swiss CHF= 0.9815 0.9782 +0.34%
+0.01% +0.9820 +0.9774
Sterling/Dollar GBP= 1.2131 1.2149 -0.15%
-4.90% +1.2172 +1.2105
Dollar/Canadian CAD= 1.3327 1.3270 +0.43%
-2.27% +1.3332 +1.3252
Australian/Doll AUD= 0.6762 0.6780 -0.27%
-4.07% +0.6799 +0.6763
Euro/Swiss EURCHF= 1.0874 1.0848 +0.24%
-3.38% +1.0898 +1.0850
Euro/Sterling EURGBP= 0.9128 0.9129 -0.01%
+1.60% +0.9169 +0.9113
NZ NZD= 0.6402 0.6427 -0.39%
-4.69% +0.6443 +0.6404
Dollar/Norway NOK= 8.9786 9.0110 -0.36%
+3.93% +9.0163 +8.9606
Euro/Norway EURNOK= 9.9468 9.9933 -0.47%
+0.41% +10.0007 +9.9440
Dollar/Sweden SEK= 9.6853 9.6560 +0.17%
+8.05% +9.6868 +9.6466
Euro/Sweden EURSEK= 10.7303 10.7124 +0.17%
+4.55% +10.7464 +10.7089
Swiss central bank intervention and EURCHF
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Jonathan Oatis,
Chizu Nomiyama and Dan Grebler)
((email@example.com; 646-223-6322; Reuters