* New cases not seen driving new lockdowns, but investors
unnerved
* USD touches three-week peak vs basket of currencies
* AUD, NZD rally stalled
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, June 22 (Reuters) - The U.S. dollar touched a
three-week high and commodity currencies were stalled on Monday,
as renewed worries about a second wave of coronavirus infections
sent investors into safer assets.
Moves were modest, as few expect spiking case numbers to
prompt fresh lockdowns at this point.
But with the World Health Organization reporting a record
increase in global cases on Sunday, especially in the Americas,
and Apple Inc AAPL.O protectively closing 11 U.S. stores last
week, there was no immediate cause for optimism either.
Against a basket of currencies =USD , the dollar held on to
small gains won last week and moved a whisker higher to 97.744,
before edging back to flat.
The greenback was marginally lower against the Australian
and New Zealand dollars, and steady on the yuan, euro and
British pound.
The yen JPY= was firm at 106.92 per U.S. dollar, not far
from a one-month high of 106.58 hit earlier this month.
"We expect the FX markets to remain caught between
recovering economic indicators and concerns about a second-wave
of COVID-19 infections in the week ahead," analysts at Barclays
said in a note.
Barclays expects continued pressure on the kiwi, but said
gains in the euro are possible if Purchasing Managers Index
(PMI) data due on Tuesday beats expectations and recommended
going long on euro/dollar, with a $1.14 target.
The single currency EUR= last traded flat at $1.1176 after
dipping to a three-week low of $1.1168 in early trade - squeezed
as European Union leaders remain divided on how to structure a
planned COVID-19 recovery fund. The pound GBP= , weighted as well by Brexit worries since
there has been little progress in trade discussions with Europe,
held just above a three-week low at $1.2363.
LOCKDOWNS LINGER
Total global coronavirus cases are now over 8.7 million and
focus has been on whether this may drive fresh lockdowns.
While that is seen as unlikely, localised restrictions have
been re-imposed in Beijing to contain an outbreak there and
Australia's Victoria state has also re-imposed limits on
gatherings to contain a spike in cases. The risk-sensitive Australian dollar AUD=D3 slipped
against the U.S. dollar and yen in morning trade, before paring
losses to inch about 0.2% higher against both. It last bought
$0.6844 and 73.18 yen. AUD/
The New Zealand dollar NZD=D3 was also a fraction stronger
at US$0.6418, though both currencies have lost the momentum they
had in early June.
The Reserve Bank of New Zealand announces its latest
benchmark interest rate settings on Wednesday. It is all but
certain to keep rates on hold at 0.25%, leaving markets to focus
on its tone and on talk of negative rates in the future.
Besides Tuesday's PMI data and German sentiment surveys,
also due on Tuesday, investors will also be looking to U.S.
consumer sentiment figures to gauge whether encouraging signs of
recovery from May can be sustained.
A jump in net short bets on the U.S. dollar last week to
their highest since 2018 suggests investors are positioned for
the world's rapid economic recovery to continue apace - leaving
plenty of room for surprises on the downside. At the same time, a slowdown in global central banks drawing
on the U.S. Federal Reserve's emergency dollar funding lines
could also provide dollar support. While the reduction in central bank currency swaps, on one
hand, suggests a return to normality, it also marks a pullback
in one aspect of the Fed's enormous support for global markets.
"It won't take much for the market to see this as a
liquidity headwind," said Chris Weston, head of research at
Melbourne brokerage Pepperstone.
"And when we mix in rising concerns around a renewed COVID
crisis then it may keep risk on the back foot this week."