FOREX-Dollar hits 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 United States 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.
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.
"The UST yields, while elevated historically, have been
caught in a tight range in recent weeks and thus offered little
support to the USD," said Valentin Marinov, head of G10 FX
research at Credit Agricole.
"This is due to the still very dovish tone of the Fed that
seemed to ignore the rapidly improving outlook for the US
economy."
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.
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.
"In the near-term, the U.S. dollar investors will likely
focus on the U.S. data today and tomorrow, which should confirm
that the economic outlook continues to improve," Marinov said.
"To the extent that the UST yields remain caught in recent
ranges, the overbought and overvalued USD could struggle to
recover. At the same time, supportive global risk sentiment
could be a boon for high-yielding commodity currencies like the
AUD and the NZD."
Thursday is busy with U.S. data, including retail sales
readings for March and weekly jobless figures due at 1230 GMT.
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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