FOREX-Safe-haven currencies soften as signs of recovery fan risk appetite

Reuters

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    * U.S. housing data boosts optimism on economic recovery 
    * Sterling soft after Johnson promises "Rooseveltian" boost
    * Chinese yuan, Aussie tick up after China PMI 
    * Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

    By Hideyuki Sano
    TOKYO, June 30 (Reuters) - Safe-haven currencies were on the
backfoot on Tuesday as hopes of an economic turnaround boosted
riskier assets like the Aussie and yuan, although worries about
a blowout in British public spending kept the pound under
pressure.
    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 0.1% to 107.70 yen  JPY= , having
touched a three-week high of 107.885 in the previous session,
though it was capped by its 100-day moving average around that
level.
    The safe-haven Swiss franc eased to 0.9508 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.
    End-of-quarter corporate repatriation flows appear to be
playing a role in latest moves, analysts also said.
    "On the whole, the market is cautious,"  said Minori Uchida,
chief currency strategist at MUFG Bank. "Both on the year and
compared with late February levels before the pandemic, the four
G10 currencies that have current account surpluses --  the yen,
Swiss franc, the euro and the Swedish krona -- have strengthened
against the dollar."
    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 Boris 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 massive 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.
    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 few signs 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 
    "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," said Ayako Sera, senior
market economist at Sumitomo Mitsui Trust Bank.
    The Canadian 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
    The Chinese yuan and the Australian dollar gained slightly
after a survey showed China's factory activity expanded at a
stronger pace in June, beating expectations of slowdown from
last month.  urn:newsml:reuters.com:*:nL4N2E627S
    The offshore yuan gained 0.15% to 7.0652 per dollar  CNH= 
while the Aussie rose 0.2% to $0.6879  AUD=D4 .
    The market shrugged off news that China's parliament passed
national security legislation for Hong Kong. That came after The
United States earlier began eliminating Hong Kong's special
status under U.S. law. urn:newsml:reuters.com:*:nL8N2E60GH urn:newsml:reuters.com:*:nL1N2E620T

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

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