FOREX-Dollar gives ground, Fed corporate bond buying buoys mood

* Euro gained more than 2% this month
* Dollar stable versus safe-haven Japanese yen
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Olga Cotaga
LONDON, June 16 (Reuters) - The dollar slipped and riskier
currencies rallied on Tuesday as the U.S. Federal Reserve
prepared to start its corporate bond buying scheme, while a
report flagging the possibility of more fiscal stimulus helped
to underpin investor sentiment.
After a 2.1% rise so far this month, the euro was heading
back to near $1.15, this year's high.
The Fed said it would start buying corporate debt on Tuesday
as part of an already announced stimulus scheme, and launched
its Main Street Lending Program for businesses. The move boosted confidence across asset classes and
underpinned risk-sensitive currencies, including the Australian
and New Zealand dollars.
Investor sentiment was further lifted by a Bloomberg News
report that President Donald Trump's administration was
considering a nearly $1 trillion infrastructure programme to
boost the economy, citing anonymous sources. Taken together, the news reinforced a belief authorities
will do what it takes to get the world's biggest economy back on
track.
"As long as governments around the rest of the world
continue to ease their lockdown measures, and as long as data
continues to suggest that the deep economic wounds due to the
fast spreading of the coronavirus are behind us, we would see
decent chances for risk assets to stay supported," Charalambos
Pissouros, senior market analyst at JFD Group, said.
Fed Chairman Jerome Powell is due to testify before the
Senate Banking Committee on Tuesday. He will deliver the same
testimony on Wednesday before the House Financial Services
Committee.
Investors will be listening for hints the Fed is willing to
do more.
"If so, equities and risk-linked currencies are likely to
continue their journey north, as investors keep diverting their
capital out of safe havens, the likes of the U.S. dollar, the
yen and the franc," Pissouros said.
The euro was up 0.2% at $1.1347 EUR=EBS , recovering from
falls after traders feared a second wave of coronavirus and
decided to cash in on any gains.
Beijing banned some people from leaving the Chinese capital
and halted transportation services on Tuesday to try to contain
a fresh coronavirus outbreak.
Global cases of the novel coronavirus have reached over 8
million. Deaths stand at over 434,000 and have doubled in seven
weeks. The dollar/yen was neutral at 107.35 JPY=EBS .
The Bank of Japan kept monetary settings steady on Tuesday
and stuck to its view the economy will gradually recover from
the coronavirus pandemic, signalling it has taken enough steps
to support growth for now. Market participants are awaiting the German ZEW economic
survey expectations for June at 0900 GMT and U.S. retail sales
and industrial production later in the day.
Elsewhere, sterling was up 0.2% both against the dollar and
the euro at $1.2630 GBP=D3 and 89.73 pence EURGBP=D3
respectively.