FOREX-Risk-sensitive currencies fall on fears of second wave; dollar rises

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

LONDON, June 15 (Reuters) - The dollar rose and commodity
currencies fell as a "risk-off" sentiment dominated markets,
driven in part by fears of a second wave of COVID-19 infections
after new cases were recorded in Beijing and U.S. numbers spiked
over the weekend.
Beijing reported its second consecutive day of record
numbers of new infections on Monday. In the United States, more
than 25,000 new cases were reported on Saturday
alone. Against a basket of currencies, the dollar surged overnight,
steadying somewhat in early London trading, and was up 0.2% on
the day at 0700 GMT =USD .
The Australian dollar was down around 1% versus the dollar,
while the New Zealand dollar was down 0.7%, both having hit
their weakest levels in more than a week AUD=D3 NZD=D3 .
But despite the risk-off mood, the safe-haven Japanese yen
did not strengthen significantly versus the dollar, and was at
107.28 JPY=EBS , while the Swiss franc was still relatively
weak versus the euro, at 1.0723 EURCHF=EBS .
While many analysts attributed the dollar's strengthening to
fears of a second wave of the virus, Commerzbank's Ulrich
Leuchtmann said that there had long been stories of new
infections. The fact that other safe-haven currencies did not
strengthen suggests the dollar's rise is more a product of its
recent weakening, added Leuchtmann, the bank's head of FX and
commodity research.
"In my view it is all much more trivial. Following a
pronounced period of USD weakness it is now time for a
correction and profit-taking," he said.
Industrial output in China rose for a second consecutive
month in May, but the rise was smaller than expected, suggesting
the world's second-biggest economy is struggling to get back on
track after containing the coronavirus. "More evidence of economic recovery in China is a positive
development for the global economy although market participants
understandably remain on edge over the risk of further
disruption from second waves," Lee Hardman, currency analyst at
MUFG, wrote in a note to clients.
European countries eased some border controls on Monday
following coronavirus lockdowns, a move that could help salvage
part of the summer season for Europe's battered travel and
tourism industry. The euro was down 0.2% against the dollar at $1.1232
EUR=EBS .
Financial markets may be in the process of repricing the
world's most-traded exchange rate, with derivative contracts
suggesting the euro could surge by as much as 6% against the
dollar to $1.20 by year-end. As oil prices fell, the Norwegian crown hit a 4-week low
versus the euro EURNOK=D3 . The Bank of England, Swiss National Bank and Norges Bank
will all hold meetings on Thursday and are expected to keep
their main policy rates unchanged.

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ANALYSTS' VIEW-Market jitters over second COVID-19 wave are an
overdue pullback ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>