FOREX-Aussie and kiwi down early after new virus cases in Beijing

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Markets react to weekend news on virus
* Sterling hit by EU negotiation doubts
* BOJ, BOE hold meetings this week

By Stanley White
TOKYO, June 15 (Reuters) - The Australian and New Zealand
dollars fell against their U.S. counterpart on Monday after
fears of a second wave of the coronavirus in Beijing prompted
investors to sell currencies sensitive to risk.
The Chinese yuan also dipped in offshore trade after Beijing
recorded dozens of new cases of the novel coronavirus in recent
days, all linked to a major wholesale food market. The British pound declined against the greenback due to
concerns trade negotiations between Britain and the European
Union are not making enough progress.
Traders are also monitoring a spike in coronavirus cases in
the United States, which raises concern that another outbreak
could once again slow the global economy.
"There's talk that hedge funds and other short-term
speculators came into the market early to sell the Australian
dollar because of the new infections in Beijing," said Yukio
Ishizuki, foreign exchange strategist at Daiwa Securities in
Tokyo.
"Hopefully this will not be a big outbreak, and this
downward move will not last long."
The Australian dollar AUD=D3 fell 0.39% to $0.6827, while
the New Zealand dollar NZD=D3 declined by 0.33% to $0.6420.
Both currencies are traded as liquid proxies for risk
sentiment because of their close ties to China's economy and
global commodities.
Sterling GBP=D3 shed 0.24% to trade at $1.2510. The pound
also eased slightly to 89.91 pence per euro EURGBP= , while the
euro EUR=EBS held steady at $1.1247.
Beijing is ramping up testing after a cluster of new
coronavirus cases was confirmed at Xinfadi, which is said to be
the largest food market in Asia.
China's capital had gone for almost two months with very few
infections until a new case was reported on June 12, and since
then the total number has climbed to 51.
Several U.S. states have also reported a record increase in
new coronavirus cases and hospitalizations as officials pushed
ahead with plans to reopen their economies, according to a
Reuters tally. The global economy has only just regained its footing after
the pandemic slammed the breaks on business activity earlier
this year.
Another large outbreak could roil financial markets, which
had been rallying recently on hopes for economic recovery.
In the offshore market, the yuan CNH=D3 fell to 7.0877 per
dollar, highlighting the sense of concern about the outlook.
The yuan's losses could be limited if data on Chinese
industrial production and retail sales due later on Monday
confirm growth is picking up.
The British pound fell early in Asia after a report that
British officials told their EU counterparts they will not
extend the deadline for trade talks beyond the end of this year.
Britain left the EU in January. Their relationship is now
governed by a transition arrangement that keeps previous rules
in place while they negotiate new terms.
Some investors worry Britain's economy could be thrown into
chaos if it does not agree new terms with the EU.
Sterling also faces a test this week as the Bank of England
holds a policy meeting on Thursday.
The BOE is expected to increase its quantitative easing
programme by 100 billion pounds ($125 billion), with some
analysts eyeing an even larger increase amid concerns about
future growth. The dollar was little changed at 107.46 yen JPY=EBS as
investors avoided big moves before a Bank of Japan policy
meeting ending Tuesday.
No major changes are expected, but some investors may be
interested in Governor Haruhiko Kuroda's views on growing
interest in its yield curve control policy.
U.S. central bankers discussed the option of adopting yield
curve controls to cap bond yields, Federal Reserve Chairman
Jerome Powell said last week. = 0.7994 pounds)