FOREX-Safe-haven currencies on defensive, sterling soft on spending plan

Reuters

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

    By Hideyuki Sano
    TOKYO, June 30 (Reuters) - Safe-haven currencies were on the
back foot on Tuesday as hopes of an economic turnaround boosted
stock prices while sterling was under pressure after British
Prime Minister Boris Johnson promised a "Rooseveltian" boost to
public spending.
    Spurring fresh optimism on the U.S. economy was pending home
sales data, which showed that housing market activity had
quickly recovered in May from a plunge triggered by the
pandemic.  urn:newsml:reuters.com:*:nL1N2E60NH
    Pending home sales, based on contracts signed last month,
surged 44.3%, compared to economists' forecast for 18.9% rise.
    Wall Street shares were also buoyed by a 14% surge in Boeing
 BA.N  as the embattled aircraft maker began a series of
long-delayed flight tests of its redesigned 737 MAX.
 urn:newsml:reuters.com:*:nL1N2E616E
    The dollar has climbed to 107.59 yen  JPY= , having touched
a three-week high of 107.885, though it was capped by its
100-day moving average around that level.
    The safe-haven Swiss franc eased to 0.9511 per dollar  CHF= 
and 1.0697 per euro  EURCHF= .
    The euro stood at $1.1244  EUR= , having gained a tad
against the U.S. currency on Monday.
    Sterling traded at $1.2297  GBP=D4 , after sliding to a
one-month low of $1.2252 on Monday on concerns about how
Britain's government will pay for its planned infrastructure
program following Prime Minister Johnson's promise to increase
spending.  urn:newsml:reuters.com:*:nL8N2E61FB
     "This is the moment for a Rooseveltian approach to the UK,"
Johnson told Times Radio on Monday, referring to former U.S.
President Franklin D. Roosevelt's "New Deal" programme, which
included a raft of job-creating public works projects to help
the United States recover from the Great Depression.
    There are also doubts about whether Britain will seal a
trade pact with the European Union as little progress has been
made in agreeing on Britain's future relationship with the bloc,
which it exited on Jan. 31
     The British currency hit a three-month low against the
euro, which rose to as high as 0.9175 pound on Monday. The
common currency last stood at 0.9138 pound.  urn:newsml:reuters.com:*:nL8N2E61XX
    All in all, the dollar index  =USD  was little changed at
97.444.
    U.S. Federal Reserve Chair Jerome Powell said late on Monday
the outlook for the world's biggest economy is "extraordinarily
uncertain" and will depend both on containing the coronavirus
and on government efforts to support the recovery. urn:newsml:reuters.com:*:nL1N2E61YP
    The epidemic showed little sign of abating as Arizona
ordered the closure of bars and gyms, joining other sun belt
states like Florida and Texas in reversing reopenings.
 urn:newsml:reuters.com:*:nL1N2E62CY 
    Los Angeles County also recorded an "alarming" one-day spike
of new COVID-19 infections.  urn:newsml:reuters.com:*:nL1N2E60V9
    "We've seen cases rising again even in countries that appear
to have contained the disease such as Japan and Australia," said
Ayako Sera, senior market economist at Sumitomo Mitsui Trust
Bank.
    "The bankruptcy of Cirque de Soleil highlights the fact that
the show biz and tourism sector will continue to suffer. The
economy is still barely tottering," she said.
    The entertainment group filed for bankruptcy protection on
Monday as the pandemic forced the famed circus operator to
cancel shows and lay off its artistes.  urn:newsml:reuters.com:*:nL4N2E63VJ
    On the diplomatic front, the United States began eliminating
Hong Kong's special status under U.S. law on Monday, halting
defence exports and restricting the territory's access to high
technology products as China prepares controversial national
security legislation for Hong Kong.  urn:newsml:reuters.com:*:nL1N2E620T
    The offshore Chinese yuan barely budged at 7.0746 per dollar
 CNH= .

 (Reporting by Hideyuki Sano
Editing by Shri Navaratnam)
 ((hideyuki.sano@thomsonreuters.com; +81 3 4563 2768;))

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