* Pound under pressure as Johnson fans no-deal Brexit
worries
* China-U.S. friction undermines Aussie
* Fed's policy review next key focus
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Hideyuki Sano
TOKYO, June 18 (Reuters) - The British pound on Tuesday
languished near this year's low on rising worries Boris Johnson,
the front-runner to replace UK Prime Minister Theresa May, could
put Britain on a path towards a dreaded no-deal Brexit.
The Australian dollar is also at its lowest levels since the
flash crash of early January, hit by growing expectations of
another rate cut by the country's central bank and by the
spectre of a further slowdown in China - Australia's largest
export market.
The yen and the euro were steadier, with investors holding
out for trading clues from policy-setting meetings by the U.S.
Federal Reserve and the Bank of Japan as well as a conference
organised by the European Central Bank, all scheduled this week.
"While major currencies were little moved now, when you look
at market moves over the past week or so, many commodity
currencies and emerging market currencies are weak, reflecting
broad risk-off sentiment," said Masashi Hashimoto, senior
analyst at MUFG Bank.
The U.S-China trade frictions and rising geopolitical
tensions in the Strait of Hormuz after recent attacks on tankers
are all undermining risk sentiment, he said.
Worries about Brexit hit the British pound, which tumbled to
a 5-1/2-month low of $1.2532 on Monday and last traded at
$1.2539 GBP=D4 .
Sterling also fell to its weakest level since January
against the euro, which climbed to 89.50 pence EURGBP=D4 ,
compared to a two-year low of 84.56 touched just over a month
ago.
Former foreign minister Boris Johnson got a boost on Monday
in his campaign to succeed May as one of his former rivals and
EU supporter Matt Hancock backed him. That rattled markets as Johnson, the face of the official
campaign to leave the European Union in the 2016 referendum, has
promised to lead the United Kingdom out of the EU with or
without a deal.
The pound could be in for a rough ride in coming days, with
a raft of potentially market-moving events ahead, including
consumer inflation and retail sales data, due on Wednesday and
Thursday respectively, and the Bank of England's policy
announcement on Thursday.
The risk-sensitive Australian dollar drooped at $0.6855
AUD=D4 , just above its 5-1/2-month low of $0.6849 hit
overnight, as trade tensions between the United States and China
have shown few sign of abating.
Markets are pricing in about 50% chance of another rate cut
next month by the Reserve Bank of Australia, which delivered its
first easing in almost three years just two weeks ago.
RBAWATCH
The euro hardly budged at $1.1220 EUR= while the dollar
was little moved at 108.53 yen JPY= .
The dollar was slightly undermined by the New York Fed's
business index showing a record fall this month to its weakest
level in more than 2-1/2 years. The Fed's two-day policy meeting starting later on Tuesday
is the next major focus after markets have priced in more than
two 25 basis-point rate cuts by year-end.
That marks a sharp contrast to the Fed's official forecast
in March, which showed policymakers deemed the next move would
be a hike.
"As markets are now pricing in rate cuts in the second half
of this year, the question is how the Fed will respond to such
an outlook," said Shinichiro Kadota, senior strategist at
Barclays.
(Editing by Shri Navaratnam)