FOREX-Euro in 'wait and see' mode ahead of crucial EU summit

(Adds quotes, background on summit)
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* No end in sight to U.S. virus surge
* Dollar supported on safe-haven flows

By Julien Ponthus
LONDON, July 17 (Reuters) - The euro was flat against the
dollar on Friday before a European Union summit that will try to
reach agreement on a 750 billion- euro recovery fund.
No outcome is expected at the summit until evening, at best,
but either an agreement or a collapse in the talks will have a
major impact on the currency when trading resumes.
The euro EUR=D3 , which retreated from four-month highs
reached earlier this week, held steady at $1.1389. It was higher
against the British pound EURGBP= at 90.72 pence.
"A positive outcome should see the single currency retest
the week's highs at $1.1450", wrote Jeffrey Halley, an analyst
at Oanda, noting an unfavourable outcome might send the euro as
as low as $1.13.
Implications for the euro should the EU go ahead with its
plan would also be long-lasting, Marshall Gittler, head of
investment research at BDSwiss, told his clients.
A deal "would make the euro more attractive as a reserve
currency" by "establishing a central fiscal capacity that can
respond to adverse shocks, which would make monetary union more
stable", he said.
Many traders expect that the summit will reach no agreement
and EU leaders will need to meet again to find a compromise.
For the week, the dollar was on course for gains against the
yen, sterling, and the Swiss franc. The yuan fell by the most in
three weeks, undone by a steady increase in diplomatic frictions
between the United States and China.
Some investors say they are beginning to see signs that a
surge in coronavirus infections is threatening the U.S. economy.
Others point to deteriorating U.S.-China ties as a reason to
avoid riskier trades, which should keep the dollar in demand for
now.
The dollar stood at 107.13 yen JPY= and sterling GBP=
was little changed at $1.2541. The dollar was quoted at 0.9451
Swiss franc CHF= , close to its highest since July 3.
Another jump in coronavirus infections has forced California
and other U.S. states to at least partly shut down again.
In addition, President Donald Trump's
administration is considering banning travel to the United
States by all members of the Chinese Communist Party.
The yuan CNY=CFXS fell by the most since June 24 to 6.9982
to the dollar.