Wires

FOREX-Dollar rallies as stock markets recover; yen down sharply

cutting rates.

* Dollar surges, adds more than 2% vs yen

* ECB did not follow Fed, BoE in cutting rates

* European markets rebound after Thursday's meltdown

* Policymakers struggle with coronavirus response

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Adds new comment, FX table, updates prices, changes byline, dateline, previous LONDON) NEW YORK, March 13 (Reuters) - The dollar advanced on Friday, posting sharp gains against the safe-haven yen as stock markets recovered globally and investors cheered efforts made by governments and policymakers to address the economic fallout from the coronavirus outbreak. The greenback extended gains against several currencies after a blowout in swap spreads on Thursday signaled that investors want dollars. While those spreads came in on Friday, the dollar held strong. But market participants said signs of dollar funding stress persist and policymakers probably need to do more. "Underlying concerns regarding the economic fallout from the coronavirus on credit markets broadly remain," said Shaun Osborne, chief FX strategist, at Scotiabank in Toronto. "It may be tempting to look for signs of a low in global stocks but with the underlying issue - the coronavirus - still unchecked, we think that is premature at this point," he added. He noted that the cost of raising U.S. dollar funds in the cross-currency euro swap market has widened again on Friday after narrowing the day before on the Federal Reserve's announcement to inject more liquidity into the banking system. Wider spreads in the cross currency basis swap market suggested increased signs of U.S. dollar shortage for corporates seeking funding. In mid-morning trading, the dollar gained 2.2% against the yen to 106.94. It also rallied versus another safe haven, the Swiss franc, rising 0.9% to 0.9508 franc. Against a basket of currencies, the dollar rose 0.6% to 98.085. The euro, meanwhile, nursed losses despite European Central Bank policymakers trying to reassure markets. European assets sold off on Thursday after investors were underwhelmed measures. It was last down 0.5% at $1.1125. The ECB on Thursday announced a stimulus package that provides loans to banks with rates as low as -0.75% and increases bond purchases, but it did not join its counterparts in the United States and Britain ECB President Christine Lagarde aggravated a market sell-off by saying it was not the central bank's job to close the spread between the borrowing costs of various members, comments that she later tried to roll back. The pound also weakened 0.3% against the dollar to$1.2510. The greenback's rebound this week reflects its role as the world's most liquid currency, which investors seek in times of stress. The Fed meets next week and many analysts now expect the central bank to chop its own target policy rate, quite possibly to zero, and give markets new guidance about how it plans to combat the economic fallout from the coronavirus. The Australian and Canadian dollars bounced on Friday after getting mauled on Thursday as investors shunned riskier currencies that are linked to the global commodities trade.

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Currency bid prices at 10:18AM (1418 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low BidPrevious Change

Session

Euro/Dollar EUR= $1.1122 $1.1183 -0.55% -0.79%+1.1221 +1.1104Dollar/Yen JPY= 106.8100 104.6300 +2.08% -1.88%+107.4900 +104.5100Euro/Yen EURJPY= 118.79 117.01 +1.52% -2.59%+119.7600 +116.9000Dollar/Swiss CHF= 0.9503 0.9437 +0.70% -1.81%+0.9554 +0.9423Sterling/Dollar GBP= 1.2499 1.2571 -0.57% -5.73%+1.2624 +1.2455Dollar/Canadian CAD= 1.3877 1.3926 -0.35% +6.86%+1.3947 +1.3782Australian/Doll AUD= 0.6278 0.6234 +0.71% -10.58%+0.6326 +0.6233

ar

Euro/Swiss EURCHF= 1.0571 1.0555 +0.15% -2.59%+1.0618 +1.0551Euro/Sterling EURGBP= 0.8895 0.8894 +0.01% +5.22%+0.8940 +0.8845NZ NZD= 0.6129 0.6086 +0.71% -9.01%+0.6160 +0.6087

Dollar/Dollar

Dollar/Norway NOK= 9.9663 10.1613 -1.92% +13.53%+10.2363 +9.8832Euro/Norway EURNOK= 11.0850 11.3478 -2.32% +12.68%+11.4520 +11.0055Dollar/Sweden SEK= 9.7484 9.7346 +0.00% +4.29%+9.7754 +9.6258Euro/Sweden EURSEK= 10.8415 10.8414 +0.00% +3.56%+10.9411 +10.7743

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Iain Withers in London)