FOREX-Dollar dips as commodity currencies gain on recovery hopes

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Australian and New Zealand dollars rise
* More data points to signs of economic recovery
* Investors await Fed meeting

By Stanley White
TOKYO, June 8 (Reuters) - The U.S. dollar fell against the
Antipodean currencies and the British pound after surprising
improvement in U.S. labour market data bolstered expectations
for economic recovery, which reduced safe-harbour demand for the
greenback.
The Australian and New Zealand dollars both rose to their
strongest since January after data showed a
smaller-than-expected fall in Chinese exports, which supports
commodity currencies.
In contrast, the U.S. dollar traded near its highest in more
than two months against the yen, supported by recent gains in
long-term Treasury yields as investors await the outcome of a
two-day U.S. Federal Reserve meeting ending on Wednesday.
Sentiment has improved dramatically in the currency market
as traders focus on signs of a rebound from the coronavirus
outbreak as economies reopen from lockdowns, which has hurt the
dollar and driven money into so-called risk-on trades.
"Commodities and emerging market currencies are clearly
finding it easier to rise against the dollar on hopes of
economic recovery, but it is a different story when it comes to
the yen," said Junichi Ishikawa, senior foreign exchange
strategist at IG Securities in Tokyo.
"For dollar/yen the focus is more on yields, which is
pushing the currency pair higher."
Japan's economy shrank less than initially estimated in the
first quarter due to the coronavirus outbreak, revised data
showed earlier on Monday, but the yen took the data in its
stride. The Australian dollar AUD=D3 traded at $0.6971,
approaching its firmest since Jan. 2.
The New Zealand dollar rose to $0.6537, the highest since
Jan. 29.
New Zealand has no active cases of COVID-19 in the country
for the first time since Feb. 28, the health ministry said in a
statement on Monday. New Zealand will announce later on Monday whether it will
remove all remaining social distancing and economic
restrictions, barring border controls.
Against the pound GBP=D3 , the dollar fell 0.25% to $1.2705
in Asia on Monday, close to its lowest since March 12.
The dollar traded at 109.49 yen JPY=EBS , close to a
two-month high set on Friday.
Underpinning the dollar was a surprising recovery in U.S.
employment in May after the economy suffered record job losses
in April, data showed on Friday.
The jobless rate also fell to 13.3% last month from a
post-World War Two high of 14.7% in April, offering hope that
the world's largest economy is starting to stabilise after the
pandemic triggered a wave of job cuts. Some investors may avoid making big trades before the
Federal Reserve meeting ending on Wednesday to see how Chairman
Jerome Powell views a recent rise in 10-year Treasury yields and
a steepening in the yield curve.
The onshore yuan CNY=CFXS was little changed at 7.0863 per
dollar after exports from China, the world's second-largest
economy, fell less in May than the market expected, data showed
on Sunday. The pandemic first emerged in China late last year and has
caused a sharp contraction in global economic activity, but many
traders are now focused on the pace of recovery in the second
half of this year.
Some analysts said there are still many risks to the
outlook, including diplomatic tension between the United States
and China, and the U.S. presidential election later this year.
Net short U.S. dollar positioning fell to $8.17 billion in
the week ended June 2 from $8.6 billion the previous week,
according to U.S. Commodity Futures Trading Commission data
released on Friday, which may discourage some investors from
selling the dollar further.
The euro EUR=D3 traded at $1.1296 in Asia on Monday. The
common currency is riding a wave of optimism after the European
Central Bank said last week it will increase bond purchases to
help the bloc's weakest economies.
Sentiment will face a test later on Monday with the release
of data forecast to show that German industrial output fell the
most on record in April.

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U.S. labor market unexpectedly improves; recovery years away
May exports slip back into contraction, imports worst in 4
years ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Editing by Christopher Cushing and Jacqueline Wong)