By Karen Brettell
NEW YORK (Reuters) - The greenback dropped and riskier currencies, including the Australian dollar, outperformed on Tuesday as risk appetite improved on hopes that lockdowns may be slowing the spread of the coronavirus in some countries.
Sterling also rose a day after British Prime Minister Boris Johnson was moved into intensive care due to worsening coronavirus symptoms.
Analysts said the British currency is benefiting from the increased risk appetite that is weighing on the U.S. dollar. Johnson's condition, while a concern, is also unlikely to mean a change in the government's policy direction in fighting the virus.
“Despite the sad news about the UK PM Johnson, fatalities in the UK remain relatively low and slowed for the second day, although the apex is still thought to be about 10 days away,” Win Thin, global head of currency strategy at Brown Brothers Harriman in New York, said in a report.
“High-frequency data on coronavirus infections and death rates continue to stabilize,” Thin said.
In Spain and Italy, which account for over 40% of the world's fatalities, the death rate has been declining for several days, and public discussion has turned to how and when to ease weeks of drastic curbs on personal and economic activity.
New York state, the U.S. epicenter of the coronavirus, is nearing a plateau in number of patients hospitalized, Governor Andrew Cuomo said on Tuesday, a hopeful sign even as deaths in his state and neighboring New Jersey hit single-day highs.
The dollar was last down 0.81% versus a basket of currencies at 99.92. <=USD>
The Australian dollar
The dollar was down 0.40% against the yen
Japanese Prime Minister Shinzo Abe on Tuesday declared a state of emergency to fight coronavirus infections in major population centres and rolled out a nearly $1 trillion stimulus package to soften the economic blow.
Action by central banks to ease a scramble for dollars that was seen in recent weeks has also helped bring some calm to markets.
"We've got a nice decline in volatility across forex and equity markets," said Kenneth Broux, FX strategist at Societe Generale. "We know central banks have done a very good job in alleviating the strain in dollar markets and that's feeding through."
Currency bid prices at 4:09PM (2009 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Euro/Dollar EUR= $1.0897 $1.0791 +0.98% -2.80% +1.0924 +1.0785
Dollar/Yen JPY= 108.7600 109.2000 -0.40% -0.09% +109.2700 +108.6800
Euro/Yen EURJPY= 118.51 117.85 +0.56% -2.82% +119.0200 +117.5200
Dollar/Swiss CHF= 0.9691 0.9786 -0.97% +0.13% +0.9793 +0.9686
Sterling/Dollar GBP= 1.2343 1.2229 +0.93% -6.91% +1.2384 +1.2167
Dollar/Canadian CAD= 1.3990 1.4109 -0.84% +7.73% +1.4142 +1.3945
Australian/Doll AUD= 0.6180 0.6086 +1.54% -11.98% +0.6207 +0.6077
Euro/Swiss EURCHF= 1.0562 1.0560 +0.02% -2.67% +1.0594 +1.0556
Euro/Sterling EURGBP= 0.8826 0.8822 +0.05% +4.40% +0.8864 +0.8801
NZ NZD= 0.5978 0.5930 +0.81% -11.25% +0.6015 +0.5921
Dollar/Norway NOK= 10.2720 10.4287 -1.50% +17.01% +10.4612 +10.1295
Euro/Norway EURNOK= 11.2030 11.2480 -0.40% +13.88% +11.2950 +11.0520
Dollar/Sweden SEK= 10.0370 10.1206 +0.05% +7.38% +10.1325 +9.9525
Euro/Sweden EURSEK= 10.9409 10.9352 +0.05% +4.51% +10.9590 +10.8641
(Reporting by Karen Brettell; Additional reporting by Iain Withers in London; Editing by Jonathan Oatis and Alistair Bell)