FOREX-Dollar dips to four-week low as yields pull back; rouble sinks

* Russian rouble drops more than 1% on reports of U.S.
sanctions
* Euro hits four-week high to dollar with U.S. yields
subdued
* Commodity-linked Aussie and Kiwi reach three-week peaks
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By Ritvik Carvalho
LONDON, April 15 (Reuters) - The U.S. dollar sank to a
four-week low against other major currencies on Thursday as
Treasury yields pulled back from last month's surge, with
investors increasingly convinced the Federal Reserve will keep
interest rates low for some time.
The Russian rouble RUBUTSTN=MCX sank more than 1% to 76.65
per dollar on reports the U.S. will announce sanctions on Russia
as soon as Thursday for alleged election interference and
malicious cyber activity. The dollar index =USD , which tracks the it against six
other currencies, dipped to its lowest since March 18 at 91.535
in the European session before recovering to be basically flat
at 91.590.
The euro EUR= rose as high as a four-week top of $1.1990,
matching the highest level since March 4, before trading little
changed at $1.19735.
The dollar changed hands at 108.87 yen JPY= , after hitting
a three-week low of 108.755 on Wednesday.
"Following the muted USD reaction to the March inflation
numbers earlier in the week, it seems that the positive U.S.
inflation and growth stories are now largely priced into USD,"
said ING's chief EMEA FX and IR strategist Petr Krpata.
"Hence, the positive impact on USD may be limited and with
U.S. Treasury yields well behaved, the solid U.S. data may
support G10 pro-cyclical FX today."
Ten-year U.S. bond yields eased to 1.6165% US10YT=TWEB in
European trade, down from a 14-month peak of 1.776% reached in
late March, reducing the dollar's yield attraction.
Repeated assurances from Fed officials that they will keep
interest rates low have helped stabilise U.S. bonds, especially
at the short end of the market.
Meanwhile, stocks have marched higher, with the S&P 500
.SPX setting records this week.
"Risk sentiment is improving," dragging on bond yields and
the dollar, said Osamu Takashima, chief currency strategist at
Citigroup Global Markets Japan.
"I believe the dollar weakening trend could continue," with
a move toward 108 yen and $1.205 per euro in the near term, he
said.
Fed Chair Jerome Powell said on Wednesday that in time the
U.S. central bank would reduce its monthly bond purchases before
it committed to an interest rate increase, a scenario many
investors had regarded as a given. A weaker U.S. dollar also saw commodity currencies
supported. The Australian dollar AUD= rose as high as $0.7754
on Thursday for the first time since March 23, following a 1%
rally the day before that saw it break out of its tight trading
band over the past few weeks.
The New Zealand dollar NZD= also rose to a three-week high
of $0.7174.
"When economic data is strong and the Fed is not turning
hawkish, we could see risk-sensitive currencies gaining against
both the dollar and the yen," said Yujiro Goto, currency
strategist at Nomura Securities.
Thursday is busy with U.S. data, including retail sales
readings for March and weekly jobless figures due at 1230GMT.
Bitcoin BTC=BTSP stood near the record high of $64,895.22
reached on Wednesday, when cryptocurrency platform Coinbase
COIN.O made its debut in Nasdaq in a direct listing. The
world's most popular digital token last changed hands around
$63,250.
After volatile trading, the stock closed at $328.28, which
gave the firm a market capitalisation of $65.39 billion, about
the same as New York Stock Exchange owner Intercontinental
Exchange Inc ICE.N .

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