* Greenback broadly stronger amid demand for safer assets
* Bitcoin on back foot after dipping below $52,000
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Kevin Buckland
TOKYO, March 25 (Reuters) - The dollar hit a fresh
four-month high to the euro on Thursday as the U.S. pandemic
response continued to outpace Europe's, which has been hobbled
by extended lockdowns and delayed vaccine rollouts.
The safe-haven greenback remained broadly stronger following
a two-day rally amid worries ranging from Europe's third
COVID-19 wave and potential U.S. tax hikes to the persistent
spectre of inflation.
Even Germany's reversal of a call for a strict lockdown over
the Easter period did little to build confidence in the region's
economic outlook, instead compounding discontent with Chancellor
Angela Merkel's handling of the pandemic. "The weak point in Europe remains around the vaccine rollout
amid the rise in new virus cases and the tightening of
restrictions ... which likely means the mooted acceleration in
Q2 may have to be pushed back by a quarter," Tapas Strickland,
director of economics and markets at National Australian Bank,
wrote in a client note.
"The narrative of the U.S. outperforming Europe in the
coming quarter remains."
The euro EUR= traded near the four-month low of $1.1809
touched earlier in the Asian session, while a gauge of the
dollar against six major rivals =USD hovered just below a
four-month high of 92.617 reached overnight.
The dollar gained 0.1% to 108.835 yen JPY= , another safe
haven currency, as the pair continued to consolidate below 109.
Australia's dollar AUD= , considered a liquid proxy for
risk appetite, bounced 0.2% after earlier dipping to $0.7579,
the lowest level since Feb. 2.
U.S. Treasury Secretary Janet Yellen and Federal Reserve
Chair Jerome Powell expressed their confidence in the U.S.
recovery during a second day of testimony to Congress on
Wednesday.
Yellen told lawmakers she was open to banks buying back
stock and paying dividends, an updated view showing her
confidence in the economy. Powell also said he thinks 2021 will
be a "very, very strong year in the most likely case."
A day earlier, though, the treasury secretary had put
investors on alert after espousing tax hikes to pay for
President Joe Biden's plans for upgrading infrastructure and
other investments.
Inflation could also rear its head as disruptions in the
supply chain exert cost pressures for manufacturers, with U.S.
factory activity picking up in early March. Meanwhile in Europe, an unexpected expansion of business
activity did little to brighten the mood, with renewed COVID-19
lockdowns in many of the bloc's member nations meaning the gains
may not last through April. Concerns have been magnified because the third wave of
infections is being largely driven by the U.K. strain of the
virus, according to Commonwealth Bank of Australia strategist
Kim Mundy.
"The risk is that the more contagious and deadly strain of
the virus elicits a stronger response from European governments,
which sees Europe remaining locked down for longer," she wrote
in a note.
"A significant delay to Europe's re-opening efforts will
only widen the divergence between the economic outlook in Europe
and the U.S.," putting additional pressure on the euro, she
said.
In cryptocurrencies, bitcoin BTC=BTSP continued to swing
widely, falling below $52,000 again in early Asian trading
before recovering to around $52,667. That is after briefly
topping $57,000 overnight.
Less than two weeks earlier, the token surged to a
record-high $61,781.83.
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Currency bid prices at 034 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1812 $1.1815 -0.02% -3.32% +1.1815 +1.1809
Dollar/Yen JPY=D3 108.8370 108.6800 +0.06% +5.29% +108.8570 +108.7500
Euro/Yen EURJPY= 128.57 128.42 +0.12% +1.30% +128.6100 +128.4300
Dollar/Swiss CHF=EBS 0.9359 0.9358 +0.02% +5.79% +0.9361 +0.9360
Sterling/Dollar GBP=D3 1.3686 1.3680 +0.05% +0.18% +1.3689 +1.3680
Dollar/Canadian CAD=D3 1.2576 1.2582 -0.05% -1.24% +1.2584 +1.2574
Aussie/Dollar AUD=D3 0.7593 0.7581 +0.20% -1.25% +0.7599 +0.7579
NZ NZD=D3 0.6971 0.6961 +0.17% -2.90% +0.6973 +0.6960
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX
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World FX rates https://tmsnrt.rs/2RBWI5E
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