FOREX-As lockdowns ease, commodity currencies cautiously move up

* Oil, iron ore rally boosts Loonie and AUD
* Pound near 7wk low on Brexit worries, talk of negative
rates
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, May 18 (Reuters) - The dollar wavered on Monday
as investor optimism about the re-opening of economies around
the world lifted commodity prices and exporters' currencies,
while talk of negative interest rates held the pound near an
almost two-month low.
Oil futures LCOc1 rose 3%, nudging the Canadian dollar
CAD=D3 a touch higher. Dalian iron ore futures DCIOcv1 hit a
record peak, helping lift the Australian dollar from a one-week
low. O/R IRONORE/
As centres of the coronavirus outbreak from New York to
Italy gradually lift restrictions, the improved sentiment also
supported other Asian currencies. But tension between the United
States and China tempered the overall mood and kept a lid on
broader gains.
The New Zealand dollar NZD=D3 rose 0.4%, though at $0.5956
it could not break past 60 cents. The Aussie AUD=D3 was up
half a percent, but still remained under 65 cents at $0.6455.
AUD/
The Chinese yuan CNY= , a barometer of Sino-U.S. tensions,
barely moved from a one-week low hit last week - highlighting
the caution underpinning traders' outlook. CNY/
"There are three hurdles to cross: The shape of the
recovery...U.S.-China tensions and worry over unconventional
monetary policy," Bank of Singapore FX analyst Moh Siong Sim
said.
"I think the dollar is settling in to a broad trading range
waiting to see how all these macro uncertainties play out."
Against the yen JPY= , the U.S. currency sat more or less
in the middle of a range it has kept since April, at 107.10 per
dollar. It was marginally softer against a basket of currencies
=USD .
The pound sank to a seven week low of 89.58 pence per euro
EURGBP= and was under pressure at $1.2107 GBP= after a
week-long deadlock over a post-Brexit trade deal with the
European Union and increasing focus on the possibility of
negative rates.
The Bank of England's chief economist Andy Haldane did not
rule such a move out in an interview with the Telegraph
newspaper published on Saturday. DEFENSIVE
The depth of the economic damage already wrought by the
coronavirus pandemic is also becoming plainer just as rising
trade tensions obscure the outlook.
Japan has slipped into recession for the first time since
2015, and policymakers are bracing for the nation's worst
postwar slump in the current quarter. Thailand's economy
contracted at its sharpest pace in eight years.

Purchasing Managers' Index surveys due across major
economies later this week offer the next insight into the
outlook.
Markets are also on edge for a Chinese response to the Trump
Administration's move to block chip supplies to Huawei after
China's Global Times newspaper flagged possible retaliation.
"We remain defensive," Bank of America's foreign exchange
analysts said in a Friday note that was published on Monday.
"This week, we went short Aussie/yen," they wrote.
"In addition to our more bearish global outlook than the
consensus, we are increasingly concerned about U.S.-China trade
risks, as China will be unable to meet 'Phase 1' trade
commitments and is facing criticism about the way it has handled
COVID-19."