FOREX-Dollar drops for third-straight day as inflation fears fade

* Dollar index hits one-week low
* ECB to accelerate money printing
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

(Adds details on ECB meeting, analysts' comments, updates
prices)
By John McCrank and Elizabeth Howcroft
NEW YORK, March 11 (Reuters) - The dollar fell for a third
straight day on Thursday as the European Central Bank said it
would keep a lid on borrowing costs, while U.S. data eased
inflation fears and jobless claims fell to a four-month low,
giving a boost to riskier currencies.
The ECB said it was ready to accelerate money-printing to
keep eurozone yields down, signaling to skeptical markets it was
determined to lay the foundation for a solid economic recovery.
In the United States, soft consumer prices data on Wednesday
helped to allay concerns about a possible spike in inflation
when economies reopen from the COVID-19 pandemic.
That helped stabilize Treasury yields and lift world
equities markets to their highest in over a week. "The market had probably got itself a little bit too
oversensitive about rising runaway inflation - which there isn't
yet," said Kit Juckes, head of FX strategy at Societe Generale.
The soft inflation data "gives us respite from risk aversion
and reverses some of the recent currency moves," he added.
The Dow Jones Industrial Average .DJI hit an all-time high
for the fourth straight session on Thursday after a
bigger-than-expected fall in weekly jobless claims reinforced
expectations of a labor market recovery. The dollar index =USD was down 0.14% at 91.686 against a
basket of currencies, having touched a one-week low earlier in
the session. The greenback had hit a three-month high of 92.506
on Tuesday.
The euro was around 0.14% higher against the dollar, at
$1.19450 EUR=EBS . It has fallen 2.1% so far this year.
"The European outlook has disappointed many people and the
expectations for the eurozone are still beleaguered by COVID-19,
and that's kind of preventing the euro from really taking off
today," said Edward Moya, senior market analyst at FX broker
OANDA
The focus later in the day will be on an auction of 30-year
U.S. Treasuries. An auction of 10-year notes on Wednesday drew
sufficient demand, helping to allay concerns about investors'
ability to absorb an increase in debt needed to finance the
response to the pandemic. "With the 10yr Treasury auction showing better demand than
feared, some calm has been restored in the US bond market,"
Mazen Issa, senior FX strategist at TD Securities, wrote in a
client note. "We are not out of the woods yet with today's 30yr
auction, but a repeat performance could help secure or signal a
renewed tailwind for risky assets."
Until there is optimism that Treasury yields are not going
to skyrocket, the dollar is likely to consolidate around its
current levels, at least until next week's meeting of the U.S.
Federal Reserve, said OANDA's Moya.
Elsewhere, the Australian and New Zealand dollars were up
for the third session in a row, both at their highest in a week
versus the U.S. dollar, helped by rising commodity prices
AUD=D3 NZD=D3 . The Japanese yen ticked 0.11% higher versus the dollar at
108.505 JPY=EBS .
In cryptocurrencies, bitcoin steadied at $56,199.90
BTC=BTSP . The digital currency has recovered some recent
losses but not surpassed its all-time high of $58,354.14, which
was reached on Feb. 21.

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