* New cases not seen driving new lockdowns, but investors
unnerved
* AUD finds support from RBA comments
* Elsewhere dollar holds gains as risks balanced
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, June 22 (Reuters) - The U.S. dollar hung on to
most of modest gains made last week, as investors opted for
safety on Monday in the face of renewed worries about a second
wave of coronavirus infections globally.
The Australian dollar caught a small boost as the head of
the country's central bank signalled he was comfortable with the
currency's recent rise and said the impact of the COVID-19
pandemic would not be as bad as first feared. But elsewhere optimism was hard to come by, with the World
Health Organization reporting a record increase in global cases
on Sunday, while Beijing and Australia's Victoria state have
been re-introducing some virus-control restrictions.
The safe-haven yen JPY= was firm at 106.87 per U.S.
dollar, not far from a one-month high of 106.58 hit earlier this
month.
Against a basket of currencies =USD , the dollar held on to
small gains won last week and moved marginally lower to 97.571.
"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 Index (PMI) data due on Tuesday beats expectations and
recommended going long on euro/dollar, with a $1.14 target.
The single currency EUR= last traded a touch firmer
at$1.1194 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
$1.2376, 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.
While that is seen as unlikely, localised restrictions have
been re-imposed in Beijing, and Australia's Victoria state.
The risk-sensitive Australian dollar AUD=D3 at first
slipped on Monday, before reversing course to gain 0.3% in
relief that Reserve Bank of Australia Governor Philip Lowe did
not seem too concerned about its 24% surge from March lows.
"It's really hard to argue that the Australian dollar is
overvalued," Lowe said in a webinar. AUD/
But it is also clear that, for now, its surging gains have
stalled, along with those of the New Zealand dollar NZD=D3 as
both have been kept in tight ranges for a week.
The kiwi was last 0.2% firmer at $0.6421.
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 sentiment
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 positioned for
the world's rapid economic recovery to continue apace - leaving
plenty of room for surprises on the downside. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
WHO reports record daily increase in coronavirus cases
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FACTBOX-Latest on the worldwide spread of the coronavirus
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POLL-NZ c.bank to stand pat but keep dovish view, as pandemic
rages nL4N2DY0H4
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