FOREX-Risk-on move dents dollar; yuan notches best day since Dec

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(New throughout)
By Kate Duguid
NEW YORK, July 6 (Reuters) - The yuan on Monday recorded its
best day against the dollar since December as investors lapped
up risky assets on growing expectations of a strong Chinese
economic rebound and as glimmers of good news in U.S. data drove
down demand for the safe-haven dollar.
An index of blue-chip Chinese shares .CSI300 soared to its
highest in five years as traders bet on a revival in China,
pushing the offshore yuan CNH= to its highest level since
March 17, its best daily performance since Dec. 12. It was last
at 7.015 yuan per dollar.
"Clearly we have an improvement in global risk appetite. And
I would pin the blame for that on Chinese regulators who appear
to have encouraged the national team in the markets, and really
helped to drive a big spike in equity indices," said Karl
Schamotta, chief market strategist at Cambridge Global Payments.
"What that signals to markets is that, although we're not
seeing a 2009-style stimulus effort in China, at least not from
a monetary policy perspective - we are seeing signs of a
concerted rescue effort."
Green shoots in U.S. data also weakened demand for the
safe-haven dollar. Against a basket of six rival currencies
=USD , it was last down 0.43% at 96.76, having earlier hit its
lowest since June 24.
U.S. services industry activity rebounded sharply in June,
almost returning to its pre-COVID-19 pandemic levels. A
resurgence in coronavirus cases, however, has forced some
restaurants and bars to close again, threatening the emerging
recovery. The multi-day move lower in the dollar index triggered a
significant technical event called a death cross - in which the
dollar index's 50-day moving average crossed below its 200-day
moving average - indicating the potential for a sell-off.
The pattern has been followed by a period of dollar weakness
in eight out of nine instances since 1980, analysts at Bank of
America said.
"It signals that you're seeing positive sentiment taking
hold... on the back of a more positive view of the global
economy," said Charles Tomes, portfolio manager at Manulife
Investment Management.