FOREX-Dollar in narrow range as U.S. virus cases grow

* 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 into 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 was stable in offshore trade before data on China's
services sector, but investors may avoid taking 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 breaks of 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 was quoted at $1.2395
on Friday in Asia.
The dollar held steady at 0.9469 Swiss franc CHF=D3 on
Friday after three straight days of gains.
The British pound GBP=D3 traded hands at $1.2471.
The dollar was little changed at 107.50 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 currency markets on Friday may be 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
to penalize 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. In the offshore market, the yuan CNH=D3 was little changed
at 7.0732 per dollar.
The Australian dollar AUD=D3 held steady at $0.6917 on
Friday before data expected to show a sharp rebound in retail
sales in May.
Across the Tasman Sea, the New Zealand dollar NZD=D3
traded at $0.6509.