FOREX-Dollar holds gains on safe haven bid as economic risks grow

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* No end in sight to U.S. virus surge
* Dollar supported on safe-haven flows
* Euro eyes EU meeting on economic stimulus

By Stanley White
TOKYO, July 17 (Reuters) - The dollar held onto gains
against most currencies as worries that a resurgence in the
coronavirus is starting to curb economic activity drew
safe-haven flows into the U.S. currency.
One notable exception was the euro, which was well supported
by hopes that European officials will agree on fiscal stimulus
measures at a meeting starting later on Friday.
Some investors say they are beginning to see troubling signs
in recent data that a relentless surge in coronavirus infections
is threatening the U.S. economy.
Others point to a widening diplomatic row between the United
States and China as reason to avoid risky trades, which should
keep the dollar supported for the time being.
"The dollar looks like a good safe haven now because of
worries about a return to coronavirus lockdowns," said Minori
Uchida, head of global market research at MUFG Bank.
"But I worry that the dollar will start to lose this status
if long-term Treasury yields continue to fall."
The dollar stood at 107.29 yen JPY= in Asia on Friday,
following a 0.3% gain in the previous session.
The euro EUR=D3 held steady at $1.1389 and was marginally
higher against the British pound EURGBP= at 90.66 pence.
Sterling GBP= was little changed at $1.2560 on Friday.
The dollar was quoted at 0.9456 Swiss franc CHF= , close to
the highest since July 3.
For the week, the dollar was on course for gains against the
yen, sterling, and the Swiss franc due to safe-haven inflows.
Another jump in coronavirus infections has forced California
and other U.S. states to at least partially shut down again,
raising fears the economy and labour market will continue to
struggle.
In addition, U.S. President Donald Trump's administration is
considering banning travel to the United States by all members
of the Chinese Communist Party, according to a person familiar
with the matter, in a move that would surely put further strain
on relations between Washington and Beijing. This week the United States has ratcheted up the pressure on
China in a wide-ranging dispute over civil liberties, access to
technology, and territorial claims that some analysts liken to a
new cold war.
The yuan was steady in offshore trade CNH=D3 but could
face some selling pressure once onshore markets CNY=CFXS open
as investors grow concerned about how China will retaliate.
The euro will take centre stage later on Friday as European
Union leaders will meet in Brussels as they seek to overcome
their differences over a proposed stimulus package.
The stakes are high because the coronavirus pandemic has
caused considerable damage and some short-term measures
supporting the labour market will soon expire.