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Euro near seven-week low after ECB; virus fears support yen

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The euro hovered near a seven-week low against the dollar on Friday after the European Central Bank was seen as more dovish than expected, while anxiety over China's coronavirus outbreak propped up the safe-haven yen.

FILE PHOTO: Euro currency bills are pictured at the Croatian National Bank in Zagreb, Croatia, May 21, 2019. REUTERS/Antonio Bronic

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TOKYO: The euro hovered near a seven-week low against the dollar on Friday after the European Central Bank was seen as more dovish than expected, while anxiety over China's coronavirus outbreak propped up the safe-haven yen.

The euro stood at US$1.1055 , touching a seven-week low of US$1.1036 hit in U.S. trade on Thursday after the ECB held interest rates steady and launched a broad review of its policy.

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ECB President Christine Lagarde on Thursday sought to redefine the ECB's main goal and how to achieve it, as years of the central bank's experiment with negative interest rates and quantitative easing have failed to deliver targeted inflation levels.

Lagarde told a news conference that risks to growth in the euro zone remained tilted to the downside and traders took her overall tone as dovish.

Purchasing Managers' Index (PMI) data from Germany and the euro zone due later on Friday is the next focus for the currency.

The common currency was also undermined by the coronavirus threat in China because some countries in the currency bloc, notably Germany, have big trade exposures to the Asian economic giant.

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Concerns about the new disease bolstered the yen, which traded at 109.55 yen to the dollar , having risen to a two-week high of 109.26 on Thursday.

The World Health Organisation (WHO) said on Thursday it was "a bit too early" to declare the new coronavirus a global health emergency, providing financial markets with some relief.

Yet many investors were anxious as China took the unprecedented measure of closing transportation networks in Wuhan, putting millions of people in lockdown.

"The Lunar New Year holiday in China has just begun and they say the virus could be latent for about a week. So at least for theRead More – Source

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