* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Dollar/yen hugs narrow trading range
* Coronavirus infections remain a threat to currencies
* Aussie in focus before Reserve Bank of Australia meeting
By Thyagaraju Adinarayan
LONDON, July 6 (Reuters) - The Chinese yuan led commodity
currencies higher against the dollar on Monday as investors
lapped up risky assets on growing expectations of a strong
Chinese economic rebound.
An index of blue-chip Chinese shares .CSI300 surged to its
highest in five years as traders bet on a revival in China,
pushing the yuan to its highest levels since March 18 against
the dollar =USD .
"The economic recovery process looks encouraging (and) looks
likely to sustain while the lack of harsh trade headlines has at
least eased concerns among investors for now," said Hao Zhou, a
strategist at Commerzbank.
A revival in Chinese economic activity bodes well for
Australia and Europe which counts Beijing as its biggest trading
partner.
The euro rose 0.5% to $1.1303 to a two-week high after data
showed orders for German industrial goods rose by 10.4% in May,
rebounding from their biggest drop since records began in 1991
the previous month.
The Australian dollar AUD=D3 rose 0.4% to $0.6975
following a 1.2% gain last week, with the market focused on a
Reserve Bank of Australia policy meeting on Tuesday.
"The markets are focused on other currency pairs, like the
Australian dollar, which is still in a clear uptrend against the
U.S. dollar due to the rise in copper prices," said Masafumi
Yamamoto, chief currency strategist at Mizuho Securities.
The broad recovery in risk appetite pushed the dollar lower.
It was already grappling with a steady rise of coronavirus
infections in the United States that has prompted investors to
cut their exposure to the dollar in recent weeks.
Against a basket of currencies =USD , the dollar edged 0.4%
down to 96.82, its lowest level since July. 2.
Goldman Sachs revised its economic projections for the U.S.
economy down to a 4.6% contraction in 2020 versus a previous
estimate of -4.2%.
"The healthy rebound in consumer services spending seen
since mid-April now appears likely to stall in July and August
as authorities impose further restrictions to contain the virus
spread," Goldman analysts said in a note.
Sterling GBP=D3 moved slightly higher to $1.2509 against
the dollar amid reports British Finance Minister Rishi Sunak
plans to raise the property tax threshold and temporarily cut
the value-added tax (VAT) in the hospitality sector.
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