FOREX-Dollar dips as risk sentiment proves elusive

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Risk appetite wanes as virus cases grow again
* Dollar gains slow yuan's rally
* Lockdown in Australian city of Melbourne weighs

By Julien Ponthus
LONDON, July 8 (Reuters) - The dollar dipped slightly on
Wednesday as investors weighed hopes for a swift economic
recovery against fears about a resurgence in the pandemic,
particularly in the United States.
Demand for the U.S. currency as a safe haven ticked down as
oil prices eased on oversupply fears, stocks dithered in Asia
and European bourses opened in negative territory.
Risk sentiment was also undermined after Federal Reserve
officials expressed concern that rising coronavirus cases could
harm economic growth just as stimulus measures start to expire.
The euro strengthened a modest 0.12% to $1.2870 EUR=EBS
while a recent fall in selling positions against the greenback
provided room for possible further drops.
"What might look lethargic at first glance is likely to be
based on uncertainty as to what will happen to the economy,"
Commerzbank foreign exchange analysts told clients in a note.
"There are strong fears that the continued spread of the
virus might quickly stifle this recovery again, which in turn
would strengthen the U.S. dollar due to its – admittedly
questionable – status as a safe haven," they said.
The greenback bought 0.9414 Swiss franc CHF=EBS , a 0.13%
dip.
Sterling GBP=D3 rose 0.14% to change hands at $1.2560 but
was stable against the euro at 0.8988 EURGBP=D3 as talks
resumed between the Britain and the European Union on terms for
their future trade relations.
Overall the pound held on a nearly three-week high as
traders awaited an announcement on Wednesday by British finance
minister Rishi Sunak of his next moves to prevent a wave of job
cuts from damaging an already weakened economy. The Norwegian krone was stable at 10.6940 against the euro
after data showed the economy rebounded in May after two months
of steep declines as a gradual reopening of businesses from
coronavirus lockdowns helped turn activity around.
Earlier, the onshore yuan CNY=CFXS was stable at 7.0176,
halting a two-day rally, after the Chinese central bank's daily
midpoint for the currency was set at a weaker than expected
level.
Other Asian currencies straddled narrow ranges as a
resurgence of coronavirus cases threatened a return of lockdown
restrictions, leaving investors fretting about the mounting
economic costs of the pandemic.
The Australian dollar AUD=D3 was flat at $0.6944 as
sentiment for the Aussie stayed weak after coronavirus lockdown
measures were reimposed in Australia's second biggest city of
Melbourne on Tuesday.