* Dollar index holds post-CPI gains
* Weekly jobless claims due
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
LONDON, May 13 (Reuters) - The dollar held on to its gains
in early European trading on Thursday, having strengthened in
the previous session after a surprisingly large rise in U.S.
consumer prices fanned inflation fears.
Data showed that U.S. consumer prices increased by the most
in nearly 12 years in April, sparking a "risk-off" move in
global markets: equities and riskier currencies fell while U.S.
Treasury yields rose. Market attention now turns to U.S. weekly jobless claims due
at 1230 GMT and retail sales numbers on Friday for guidance on
whether upward pressure on prices will persist.
U.S. Federal Reserve Vice Chair Richard Clarida said on
Wednesday that weak job growth and strong inflation in April had
not changed the central bank's plan to maintain loose monetary
policy. The dollar index was steady at 90.734 at 0758 GMT, compared
to Wednesday's high of 90.798 =USD .
ING strategists wrote in a note to clients that risk-averse
currency market moves were unlikely to persist, and the dollar
index would weaken back below 90 in the coming weeks.
"While surging prices are a clear world-wide phenomenon and
we agree that the Fed will have to hike earlier than it
currently indicates (possibly in Q1 2023 rather than in 2024 as
the Fed currently forecasts) an imminent tightening from the Fed
seems unlikely," ING said.
The Australian dollar, which is seen as a proxy for risk
appetite, was down 0.3% at 0.77055 versus the dollar, extending
losses after having its biggest daily drop since March on
Wednesday.
The New Zealand dollar NZD=D3 briefly rose after Prime
Minister Jacinda Ardern said she was exploring quarantine-free
travel with other countries, but was last down 0.2%.
The euro was up 0.1% at $1.2084 EUR=EBS . The Japanese yen
was flat against the dollar, with the pair changing hands at
109.675 JPY=EBS .
BITCOIN REBOUND
Bitcoin plunged 17% overnight when Elon Musk said in a tweet
that Tesla Inc TSLA.O will no longer accept the cryptocurrency
for car purchases. The cryptocurrency dropped from around $54,819 to $45,700,
its lowest since March 1.
But it recovered during the Asian session and was up 3% at
around $50,908 at 0759 GMT BTC=BTSP . Ether, the second biggest cryptocurrency after bitcoin,
followed a similar pattern, dropping 14% before bouncing back.
Ether hit another record high on Wednesday and is up around
440%on the year. Bitcoin is still up around 30% from where it was just before
Tesla said on Feb. 8 that it had invested around $1.5 billion in
bitcoin and would accept it for payment in the near future.
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