FOREX-Dollar holds gains on economic re-start hopes but virus risks remain

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Dollar off to firmer start in Asia
* Optimism and pessimism in tug-of-war
* Pound eyes gradual easing of coronavirus lockdown

By Stanley White
TOKYO, May 11 (Reuters) - The dollar rose against most of
its major peers on Monday as moves by the United States and
other countries to re-open their economies raised hopes for a
quicker global recovery from a deep recession triggered by the
coronavirus health crisis.
Sterling was little changed against the dollar and the euro
after British Prime Minister Boris Johnson outlined plans to
slowly ease coronavirus lockdown restrictions.
Data on Friday showed the United States shed 20.5 million
jobs in April, the steepest plunge in payrolls since the Great
Depression, but traders are starting to look past such grim
economic numbers as they bet on future growth. "The bad news about the U.S. labour market was pretty much
as expected, and people now assume that economic activity will
restart sooner rather than later in the United States and
Europe," said Tohru Sasaki, head of Japan markets research at
J.P. Morgan Securities in Tokyo.
"We don't have to be so bearish on the dollar."
While the dollar often trades as a safe-haven asset given
its reserve currency status, it has recently developed some
positive correlation with Wall Street as investors focus on
yields.
On Friday, Wall Street indexes rallied, defying the gloom
from one of the worst U.S. jobs reports in decades.
The dollar rose 0.23% to 106.90 yen JPY=EBS on Monday in
Asia, and was steady at $1.0847 against the euro EUR=EBS .
The U.S. currency changed hands at 0.9706 Swiss franc
CHF=EBS .
The Australian dollar AUD=D3 , which is often traded as a
proxy for risk because of its close ties to China's economy and
global commodities, recovered from an early fall and rose
to$0.6549.
Across the Tasman Sea, the New Zealand dollar NZD=D3 also
rose against its U.S. counterpart to $0.6148.
California, Michigan, and Ohio, three important states for
U.S. manufacturing, are taking steps to allow factories and some
businesses to resume work in a boost to sentiment. Currency futures suggest the greenback could continue to
edge higher.
Speculators trimmed net short positions in the U.S. dollar
to $9.148 billion in the week ended May 5 from $10.23 billion
the previous week, according to calculations by Reuters and U.S.
Commodity Futures Trading Commission data released on Friday.
Some traders say uncertainty about the virus still poses
downside risks for the dollar.
Vice President Mike Pence is not in quarantine and plans to
be at the White House on Monday, a spokesman said on Sunday,
despite media reports that he was self-isolating after a staffer
tested positive for the novel coronavirus. However, three senior officials guiding the U.S. response to
the pandemic have chosen to self-quarantine. In the onshore market, the yuan CNY=CFXS traded at 7.0772,
little changed on the day.
Officials in China have reported a new cluster of infections
in the northeastern province of Jilin, which is another cause
for concern. The novel coronavirus first emerged in China late last year
and then spread across the globe.
The pound GBP=D3 was little changed at $1.2432 on Monday
in Asia. Against the euro EURGBP=D3 , sterling held steady at
87.28 pence.
Johnson, in a televised address on Sunday, announced a
limited easing of coronavirus restrictions that have shuttered
much of the economy for weeks, including encouraging some people
to return to work. The government wants the rest of the United Kingdom to take
the same approach, but there were immediate divisions, with the
leaders of Wales, Scotland and Northern Ireland saying they were
sticking with the existing "stay-at-home" message.
Johnson's government has faced criticism over its handling
of the pandemic. At nearly 32,000, Britain's coronavirus death
toll is the second highest in the world, behind the United
States.