FOREX-Dollar holds gains as U.S. coronavirus surge dulls risk appetite

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Currencies show muted reaction to U.S. jobs data
* Traders cautious before U.S. holiday weekend
* U.S.-China tension over Hong Kong also a factor to watch

By Stanley White
TOKYO, July 3 (Reuters) - The dollar was hemmed in a narrow
range on Friday, supported by safe-haven flows as a resurgence
of the coronavirus in the United States discouraged some
investors from taking on excessive risk.
The yuan held steady as investors avoided big positions due
to worries about diplomatic friction between Washington and
Beijing over civil liberties in Hong Kong.
The U.S. economy added more jobs than expected in June, data
showed on Thursday, but reaction in the currency market has been
muted because another spike in coronavirus infections threatens
to once again put the brakes on economic activity.
"New infections in the United States have been on an uptrend
since June," said Junichi Ishikawa, senior foreign exchange
strategist at IG Securities.
"The market is leaning more toward buying the dollar,
particularly against emerging market currencies, because the
dollar is considered the safest asset around."
Against the euro EUR=D3 , the dollar traded at $1.1234 on
Friday.
The dollar held steady at 0.9462 Swiss franc CHF=D3 after
three straight days of gains.
The British pound GBP=D3 traded hands at $1.2463 and stood
at 90.15 pence per euro EURGBP= .
The dollar was little changed at 107.52 yen JPY=EBS .
A wave of coronavirus infections has prompted the halting of
or back-pedalling on plans to reopen economic activity in
several U.S. states after months of strict lockdowns.
Officials are also taking steps to curtail activity during
the extended Independence Day holiday weekend starting on
Friday.
Trading in other Asian currencies on Friday was subdued
before the U.S. holiday, but analysts say sentiment favours more
gains in the dollar as investors turn cautious.
Relations between the United States and China are also in
focus.
The U.S. Senate unanimously approved legislation on Thursday
that penalised banks doing business with Chinese officials who
implement Beijing's new national security law for Hong Kong,
raising the chances of further friction between the world's two-
largest economies. The onshore yuan CNY=CFXS traded at 7.0644, little moved
after data showed China's services sector expanded in June at
the fastest rate in more than a decade. The Australian dollar AUD=D3 held steady at $0.6929 after
data confirmed retail sales rebounded by a record in May.
Across the Tasman Sea, the New Zealand dollar NZD=D3
traded at $0.6518.