In This Article:
* Aussie, kiwi ahead after China data beats expectations
* Yen strength shows underlying caution remains
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, April 14 (Reuters) - The dollar slipped on Tuesday and riskier currencies rallied as China's trade data painted a less gloomy picture than markets had feared and signs of a slowdown in coronavirus deaths raised hopes that the worst of the pandemic may be over.
The Australian dollar, pound and kiwi rose to month highs.
China's yuan-denominated exports in March fell a modest 3.5% from the same period a year earlier, and imports rose 2.4% customs data showed on Tuesday.
Daily fatalities in the United States also fell sharply and states began plans to re-open their economies.
The Australian dollar rose 0.7% to $0.6432, the New Zealand dollar firmed 0.6% to $0.6131 and the pound added 0.4% to $1.2562 - their strongest since mid-March.
"The market is front-running the idea that we're going to see the case count dissipate," said Chris Weston, head of research at Melbourne brokerage Pepperstone.
"The baton is now being firmly handed over to the reality of the situation in economic data," he said, calling the Chinese figures "way better" than expected.
Dollar-denominated Chinese figures are yet to be released, and economists polled by Reuters had forecast a 14% drop in exports and a 9.5% fall in imports.
The positive mood was reflected in equity market gains in Asia, yet trepidation kept a cap on further rises in currencies.
Gold and the safe-havens of the Japanese yen and Swiss franc also rose, in a nod to the underlying caution.
The yen held at 107.60 per dollar, a fraction softer than a two-week peak hit on Monday. The euro recouped overnight losses to $1.0943.
CAN IT LAST?
The Australian dollar has now run nearly 17% from a 17-year low hit last month, and analysts are beginning to wonder if it has run out of puff as a global recession looms.
"The traditional drivers, like commodity prices and the world economy are going to put downward pressure back on the Aussie," said Joe Capurso, FX analyst at the Commonwealth Bank of Australia in Sydney.
"So it's prepped for a fall," he said. "We think it'll oscillate around 60 cents for the next couple of months."
The kiwi has also climbed 12% from a decade low in March and faces a dour outlook.
New Zealand's Treasury Department released a suite of five possible scenarios for the future of the national economy on Tuesday - all of them forecast a deep contraction in the June quarter.