FOREX-Aussie slumps, safe havens risk as Beijing finds new virus cluster

* 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 as fears
of a second wave of the coronavirus in Beijing prompted
investors to sell currencies sensitive to risk.
The Chinese yuan also fell after Beijing recorded dozens of
new cases of the novel coronavirus in recent days, all linked to
a major wholesale food market. The safe-haven yen and Swiss franc rose due to worries about
the virus.
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, as fears grow that another outbreak could
inflict greater damage on 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 0.93% to $0.6794, while
the New Zealand dollar NZD=D3 declined by 0.81% to $0.6398.
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 0.48% to trade at $1.2481. The pound
also fell to 90.08 pence per euro EURGBP= , while the euro
EUR=D3 held steady at $1.1238.
The Swiss franc edged up to 1.0704 against the euro
EURCHF= .
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 79.
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. 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.
The onshore yuan CNY=CFXS fell to a one-week low of 7.0961
per dollar, highlighting the sense of concern about the outlook.
The yuan did not budge after data showed Chinese industrial
production and retail sales missed economists estimates.
The pound fell 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 yen JPY=D3 rose 0.37% to 107.13 against the dollar,
but some investors avoided big trades before a Bank of Japan
policy meeting ending Tuesday.
No major changes are expected, but some investors may focus
on 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)