FOREX-Dollar steady ahead of services sector data, rising stocks sink yen

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Dollar/yen hugs narrow trading range
* Economic data may give some spark to dollar, euro
* Coronavirus infections remain a threat to currencies
* Aussie in focus before Reserve Bank of Australia meeting

By Stanley White
TOKYO, July 6 (Reuters) - The dollar held steady against
most currencies on Monday as investors awaited data expected to
show the U.S. services sector stopped contracting, which would
further lift hopea for an economic recovery from the coronavirus
pandemic.
The euro moved in a narrow range before economic data from
Germany and the eurozone that are also forecast to show a sharp
rebound in corporate activity and retail sales, which would ease
concerns about the economic outlook.
The yen fell against most major currencies as gains in Asian
share prices encouraged some risk-on trades.
A steady rise of new coronavirus infections in the United
States has discouraged some investors from taking big positions
in the currency market, but most market participants remain
focused on the growing likelihood that major economies will
continue to recover.
"When it comes to dollar/yen, recovery expectations are
supporting the dollar, but worries about the virus are capping
the upside," said Masafumi Yamamoto, chief currency strategist
at Mizuho Securities.
"The markets are focused on other currency pairs, like the
Australian dollar, which is still in a clear uptrend against the
U.S. dollar due to the rise in copper prices."
The dollar edged up to 107.68 yen JPY=D3 on Monday
following a 0.3% gain last week. Market activity was subdued
after the July 4 long weekend holiday in the United States.
The euro EUR=D3 rose 0.36% to $1.1287. Against the British
pound, the common currency edged up to 90.35 pence EURGBP=D3 .
Sterling GBP=D3 moved in a narrow range at $1.2494.
Against the Swiss franc, the dollar CHF=D3 dipped to
0.9432.
The Institute for Supply Management's index for
non-manufacturing activity due later on Monday is expected to
rise to 50.0 in June from 45.4 in the previous month, indicating
activity stopped shrinking.
The greenback has been locked in narrow trading ranges
recently as concerns about a resurgence in U.S. coronavirus
infections offset growing optimism about the economy.
The euro will come into focus later in the trading day as
Germany, the euro zone's largest economy, is scheduled to
release industrial orders for May.
Retail sales for all of the eurozone will also be released
later on Monday. Both indicators are forecast to recover
strongly from large declines caused by the spread of the
coronavirus.
The yen fell 0.5% against the euro EURJPY= to 121.56.
Japan's currency also fell around 0.5% against the Australian
AUDJPY= and New Zealand dollars NZDJPY= as risk sentiment
improved.
However, the yen could quickly reverse course given the
uncertainty surrounding the coronavirus, analysts said.
The onshore yuan CNY=CFXS rose to 7.0490 per dollar on
Monday, the highest since April 30. The yuan drew strength from
a jump in Chinese share prices to the highest in five years as
investors shrugged off concerns about diplomatic tension between
the United States and China.
The Australian dollar AUD=D3 rose 0.3% to $0.6962 on
Monday following a 1.2% gain last week, with the market focused
on a Reserve Bank of Australia (RBA) policy meeting on Tuesday.
Analysts expect the policy rate to stay at 0.25% amid signs
Australia's economic downturn will not be as dire as first
feared.
Recent gains in prices of copper and other commodities that
Australia exports, combined with a more positive tone for the
RBA, are likely to support the Aussie, analysts say.
However, there are still reasons to be cautious about the
Aussie. On Monday, Australia's Victoria state said it will close
its border with the country's most populous state of New South
Wales to contain a sudden spike in coronavirus infections.
Across the Tasman Sea, the New Zealand dollar NZD=D3 was
quoted at $0.6550.