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FOREX-Weak Chinese data spur safe haven bids for yen

Published 09/03/2016, 07:04 am
Updated 09/03/2016, 07:10 am
© Reuters.  FOREX-Weak Chinese data spur safe haven bids for yen
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* Disappointing China trade data revive global demand concerns

* Falling oil, metal prices weigh on commodity currencies

* ECB seen likely to ease but investors ponder extent

* BoE's Carney says Brexit would hurt U.K. economy (Updates market action)

By Richard Leong

NEW YORK, March 8 (Reuters) - News of deterioration in China's trade balance stoked safe-haven demand for the yen on Tuesday as investors shed holdings of stocks and other risky investments on renewed concerns about a slowing global economy.

Lower oil and industrial metal prices, which had reached multi-month highs in recent days, added pressure on the Canadian and Australian dollars and other commodity-sensitive currencies.

China's exports slumped 25.4 percent in February from a year earlier, the steepest drop since May 2009, while imports dropped 13.8 percent for a 16th consecutive monthly fall. China is in trouble, we are seeing a flight to safety here," said Stan Shipley, strategist at Evercore ISI in New York.

Investors prefer the yen and Swiss franc in times of market volatility and economic worries.

The dollar was down 0.8 percent at 112.56 yen JPY= after hitting a one-week low of 112.41. The euro slipped 0.8 percent at 123.92 yen EURJPY= .

The Swiss franc gained before fading in U.S. trading. It was last down 0.1 percent against the greenback at 0.9956 franc CHF= and flat at 1.0964 franc per euro EURCHF= .

The Australian and Canadian dollars pulled away from multi-month highs touched on a rally in commodity prices.

The Aussie declined 0.2 percent to $0.7455 AUD=D4 after reaching a high not seen since July of $0.7486 on Monday.

The Canadian dollar weakened 0.9 percent to C$1.3405 per U.S. dollar. It had strengthened to C$1.3262 CAD=D4 on Monday, its highest since November.

Benchmark Brent crude oil futures LCOc1 hit a three-month high of $41.48 a barrel before turning lower, and were last down 3 percent at $39.61. O/R

Copper retreated further from last week's four-month highs, and closed down 2.6 percent at $4,868.00 a tonne CMCU3 on the London Metal Exchange. euro's move was limited ahead of a European Central Bank policy meeting on Thursday, when traders widely expect the bank to embark on more stimulus to support a wobbly euro zone economy. ECBWATCH

Investors are uncertain how far it will go. Euro bears are cautious about positioning for bold action, having been badly burned previously when the ECB disappointed by choosing to take more modest easing steps. GVD/EUR

The euro was down 0.05 percent at $1.1005 EUR= , holding in a tight range against the dollar.

Sterling fell 0.4 percent against the dollar to $1.4215 GBP=D4 after Bank of England Governor Mark Carney warned a potential exit by Britain from the European Union would hurt the economy and prompt some banks to leave London.

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