* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Saikat Chatterjee
LONDON, April 21 (Reuters) - The U.S. dollar rose on
Wednesday from a seven-week low hit overnight, as broad weakness
in stock markets triggered by a resurgence of COVID-19 cases in
countries from India to Japan fuelled renewed appetite for the
safe-haven appeal of the greenback.
The safety bid also supported the Swiss franc CHF=EBS and
the Japanese yen JPY=EBS as the outlook for the global economy
soured.
The greenback has weakened more than 2% in April after a
strong March rally as investors bet that a global economic
recovery premised on a speedy rollout of vaccines would fuel
demand for non-dollar currencies like the euro and the Aussie.
The dollar index =USD , which tracks the U.S. currency
against six major peers, was up 0.11% at 91.321 in London
trading after slumping as low as 90.856 on Tuesday for the first
time since March 3.
The greenback's bounce was also accompanied by softer U.S.
Treasury yields as investors weighed the surge in COVID-19 cases
against a broad-based selloff in the U.S. dollar in recent weeks
despite strong U.S. employment and retail sales data.
Thu Lan Nguyen, a strategist at Commerzbank said more
positive U.S. data could easily kick-start another dollar rally,
particularly if the uneven pace of vaccinations fuels greater
demand for U.S. Treasuries as a hedge against a crisis.
"So for now, U.S. dollar bears should make sure that they
don't get excited too soon," she said in a note.
The benchmark 10-year Treasury yield US10YT=RR was around
1.58%, not far from its lowest since mid-March, as it continued
to consolidate following its retreat from the 14-month high at
1.7760% reached at the end of last month.
The biggest casualty of the dollar's rise in London trading
was the euro with the single currency weakening EUR=EBS 0.25%
at $1.2000, after touching a seven-week high of $1.2079
overnight.
While the euro has benefited from the dollar's weakness in
recent weeks, Georgette Boele, an economist at ABN Amro believes
the euro is likely to weaken further in coming days due to U.S.
economic outperformance and repricing of ECB rate expectations.
She expects the euro to weaken to $1.15 by the end of 2021.
The European Central Bank decides policy on Thursday, with
the Federal Reserve following next week.
Declines in U.S. yields and the dollar in April have come as
evidence mounted that the Fed would be slower in tightening
monetary policy than it had appeared to the market.
Broadly, pandemic developments triggered investor caution.
India reported its highest daily toll of 1,761 deaths from
COVID-19, while Canada and the United States extended a
land-border closure for non-essential travellers.
The Australian dollar, a barometer for risk appetite, nursed
losses at $0.7717 after weakening 0.4% overnight.
In cryptocurrencies, bitcoin BTC=BTSP traded around
$55,000, consolidating following its dip to as low as $51,541.16
on Sunday. It set a record high at $64,895.22 on April 14.
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