* Dollar reverses gains in early Asia trade to slide 0.2%
* AUD leads gains on RBA comments
* Markets slip into holding pattern ahead of data
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, June 22 (Reuters) - The dollar slipped on Monday
in a choppy session as investors tried to navigate their way
through an unsettling rise in coronavirus infections and weigh
whether it would delay an economic recovery.
The Australian dollar led modest gains in Asia as the head
of the country's central bank said the impact of the COVID-19
pandemic would not be as bad as first feared. But a record spike in new global cases has capped moves,
while moves by Beijing and parts of Australia to re-introduce
some restrictions added to the cautious mood.
The risk-sensitive Aussie AUD=D3 reversed early losses and
was last up 0.3% at $0.6854, the New Zealand dollar NZD=D3
rose 0.3% to $0.6422.
Against a basket of currencies =USD , the dollar gave back
a bit of last week's gains and fell 0.2% to 97.501.
"We've tried both sides of the story in Asia and as the
day's worn on the bulls have got the upper hand," said Westpac
analyst Sean Callow. "That's helped the Aussie to avoid breaking
any key levels. But it has not been a conclusive day."
The safe-haven yen JPY= hardly moved and was last at
106.87 per U.S. dollar, not far from a one-month high of 106.58
hit earlier this month - underlining the elevated caution.
"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 said gains in the euro are possible if Purchasing
Managers Indexed due on Tuesday beat expectations and
recommended buying euro, with a $1.14 target.
The single currency EUR= last traded 0.2% firmer at
$1.1200 after dipping to a three-week low of $1.1168 in early
trade as divisions among European Union leaders over how to
structure a planned COVID-19 recovery fund kept investors wary.
The pound GBP= held just above a three-week low at
$1.2393, weighed down by prospects of a no-deal Brexit, as
little progress has been made in trade discussions between
Britain and the European Union.
LOCKDOWNS LINGER
Total global coronavirus cases are now over 8.8 million and
focus has been on whether this may lead to fresh lockdowns.
Broadly that is seen as unlikely, even though localised
restrictions have been re-imposed in Beijing, and Australia's
Victoria state. Yet concern about such a possibility has, for now, stalled
surging gains in commodity currencies such as the Australian
dollar, which along with the New Zealand dollar NZD=D3 has
been rangebound for over a week.
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.
"Unlike in Australia, we think the RBNZ's dovishness will
blunt any potential (kiwi) strength in 2020," Morgan Stanley
analysts said in a note.
Barclays also said it expects continued pressure on the
kiwi.
Besides Tuesday's PMI data and German sentiment surveys,
investors will also be looking to U.S. consumer confidence
figures out later the same day 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 dialling back
safe-haven positions on views the world's rapid economic
recovery will continue - leaving plenty of room for surprises on
the downside.