FOREX-Safety bid supports dollar as coronavirus surge shakes confidence

* Virus surges in U.S. south and west
* California, Texas, Florida re-imposing restrictions on
business
* Risk-currency rally stalled as dollar holds ground
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, June 29 (Reuters) - A firm dollar kept riskier
currencies under pressure on Monday, as a surge in coronavirus
cases and the re-imposition of curbs to stop its spread had
investors worried that a global economic recovery could be
derailed even before it had taken root.
California ordered some bars to close on Sunday, following
similar moves in Texas and Florida, as cases nationwide soar to
record levels each day. Washington state and the city of San
Francisco have paused re-opening plans. That allowed the greenback to hang on to gains ground out
last week, and had riskier currencies such as the trade-exposed
Australian and New Zealand dollars parked toward the bottom of
ranges they have held for several weeks. AUD/
The Aussie AUD=D3 was last steady at $0.6872 and the kiwi
NZD=D3 at $0.6420 - though both are set for monthly gains of
roughly 3% as the rising risks to the global recovery have
stalled rather than reversed their steep rally.
Against a basket of currencies =USD the dollar was steady
not far below a four-week peak on Monday at 97.466. The
safe-haven Japanese yen JPY= also held at 108.18 per dollar.
"A double-dip U.S. recession is possible if widespread
restrictions are re-imposed, leading to a surge in the dollar,"
said Commonwealth Bank of Australia FX analyst Joe Capurso.
"Lockdowns are the key indicator to watch."
The jump in U.S. cases has been most pronounced in a handful
of Southern and Western states that reopened earlier and more
aggressively, serving as a warning to the potentially illusory
nature of perceived progress in controlling the virus.
New restrictions on movement have also been imposed in parts
of Beijing and Lisbon and in two municipalities in western
Germany. Argentina extended and tightened a lockdown around
Buenos Aires following a sharp rise in cases. Globally half a million people have died from COVID-19,
about a quarter them in the United States.
Elsewhere sterling GBP= nursed losses and sat at $1.2341,
just a fraction above a one-month low it hit on Friday amid
fresh doubts over whether Britain can settle a post-Brexit trade
pact with the European Union.
The euro EUR= is set to wrap up its best two months
against the dollar in a year and a half, as hopes for a united
EU response to the virus and a swift regional recovery propel
the single currency ahead about 2.5% since the beginning of May.
Investors are looking to eurozone confidence data due at
0900 GMT and German inflation figures at 1200 GMT for the latest
gauge of the region's economic health.
"Given the euro area's high (sensitivity) to global trade,
we expect more global uncertainty around the pandemic to keep
any upside capped," ANZ bank analysts said in a note.
Later in the week Europe-wide inflation data is due, along
with Chinese composite purchasing managers' index numbers and
the minutes from the June meeting of the U.S. Federal Reserve.