FOREX-Dollar slightly higher as geopolitics and virus unsettle the mood

(Updates prices, adds data on Chinese exports in 15th
paragraph)
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Geopolitics and coronavirus pose risks to financial
markets
* Many traders await release of major Chinese economic data
* Currencies move in narrow ranges amid risk aversion

By Stanley White
TOKYO, July 14 (Reuters) - The dollar was marginally higher
in narrow ranges against most currencies on Tuesday as renewed
concerns about diplomatic tension between the United States and
China and rising coronavirus cases put a dent in risk appetite.
The euro held onto gains against the greenback and the pound
as investors await data on German investor sentiment to help
gauge the pace of Europe's recovery from the health crisis.
Currency trading has thinned out as a resurgence of novel
coronavirus infections has caused some areas to place new
restrictions on business activity. Markets now face an additional threat from tit-for-tat
retaliation between Washington and Beijing over access to U.S.
financial markets, civil liberties in Hong Kong and territorial
claims in the South China Sea.
"The focus has shifted to whether or not the next round of
coronavirus lockdowns will be large enough to damage economic
growth," said Junichi Ishikawa, senior foreign exchange
strategist at IG Securities.
"The Hong Kong problem could potentially lead to new trade
friction. Negative developments on either front could cause
stocks to adjust lower, and drive some safe-haven flows to the
dollar and the yen."
The dollar stood at 107.26 yen JPY= on Tuesday following a
0.4% gain in the previous session.
The dollar traded at 0.9418 Swiss franc CHF= after eking
out three consecutive sessions of narrow gains.
The euro EUR= was quoted at $1.1346, resting below a
one-month high reached on Monday. The common currency traded at
90.40 pence EURGBP= , holding onto a 0.9% gain from the
previous session.
The United States and China are waging diplomatic battles on
several fronts that have the potential to unsettle financial
markets.
U.S. President Donald Trump's administration plans to soon
scrap a 2013 agreement between U.S. and Chinese auditing
authorities, a senior State Department official told Reuters.

This could foreshadow a broader crackdown on Chinese firms
listed on U.S. stock markets that are under fire for
sidestepping U.S. disclosure rules.
In addition, the United States has hardened its stance
against China's claims in the South China Sea and is taking
steps to end Hong Kong's special legal status in protest against
Beijing's security law for the former British colony.
The onshore yuan CNY=CFXS fell 0.2% to 7.0091 per dollar
as worries about the Sino-U.S. relationship slowed the Chinese
currency's recent rally.
The yuan was largely unmoved by data on Tuesday showing
China's exports grew for the first time since the coronavirus
outbreak. L3N2EK1HM
Data due later this week on Chinese gross domestic product
(GDP), retail sales and industrial output, which are expected to
show the world's second-largest economy staged a V-shaped
recovery in the second quarter.
The Singapore dollar SGD= and other Asian currencies fell
after data showed Singapore's GDP collapsed by a record 41.2% in
the second quarter, highlighting the carnage that the pandemic
can inflict on small, trade-reliant economies.
Demand for riskier assets is likely to take a hit after
California, the most populous U.S. state, placed new
restrictions on businesses as coronavirus cases and
hospitalizations soared. The Australian dollar AUD=D3 was little changed at
$0.6949. Sentiment for the Aussie has taken a hit as some
Australian states have also re-imposed coronavirus restrictions.
The New Zealand dollar NZD=D3 erased early losses to trade
at $0.6541.
The Antipodean currencies are considered barometers of risk
because of their close ties to commodities and China's economy.