FOREX-Dollar holds near four-month highs vs euro as recovery outlooks diverge

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

LONDON, March 25 (Reuters) - The dollar edged up as European
markets opened on Thursday, having hit a four-month high against
the euro during the Asian session, as market participants
focused on divergent recovery outlooks for the United States and
Europe, and risk appetite waned.
Global stock markets were at their lowest in two weeks after
Chinese technology shares sold off due to concerns that they
would be de-listed from American stock exchanges.
Concerns about extended lockdowns in Europe also weighed on
markets. German Chancellor Angela Merkel's decision to ditch
plans for a lockdown over Easter did little to improve
sentiment. At 0808 GMT, the dollar index was up less than 0.1% on the
day, at 92.658, having hit its highest since November 2020, at
92.697, overnight =USD .
"The dollar index (DXY) has just broken the 200 day moving
average," said James Athey, investment director at Aberdeen
Standard Investments, adding that the dollar's next move would
be crucial.
The euro was down 0.1% against the dollar, at $1.1807
EUR=EBS .
On Wednesday, 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. Stephen Gallo, European head of FX strategy at BMO Capital
Markets, wrote in a note to clients that he expected the euro to
fall to $1.16 over the next one month.
"The EU's 'third COVID wave', the relatively low vaccine
take up rate, and a more subdued fiscal impulse will probably
cause the Eurozone's recovery to lag North America's by 2-3
months," Gallo wrote.
"The ECB's desire to cap yields is evidence that even a
moderate re-pricing of European sovereign debt is a source of
systemic risk," he added.
Gallo also said that the handling of the vaccine rollout in
Europe, and "resultant forms of protectionism" could permanently
deter investors.
European leaders meet at a summit later on Thursday and are
likely to discuss vaccine supply issues. The EU on Wednesday
tightened its oversight of coronavirus vaccine exports, giving
it greater scope to block shipments to countries with higher
inoculation rates such as Britain. The Swiss National Bank kept its ultra expansive monetary
policy in place, including the world's lowest interest rate,
saying that the Swiss franc remains "highly valued".

"The fact that the Swiss banks' sight deposits have been
reasonably stable since the autumn suggests that the central
bank has largely withdrawn from the FX market," wrote
Commerzbank strategist Thu Lan Nguyen.
However, Nguyen said that she would not rule out the
possibility of further SNB interventions in the FX market to
limit possible future franc appreciation.
At 0828 GMT, the franc was down around 0.1% against the euro
at 1.1068 EURCHF=EBS .
The Aussie and Kiwi dollars were a touch higher, both up
around 0.3% against the U.S. dollar, recovering some of their
losses from the previous two sessions AUD=D3 NZD=D3 .
Elsewhere, bitcoin was little changed at around $52,321.31
BTC=BTSP .
The cryptocurrency briefly topped $57,000 in the previous
session after Tesla Inc TSLA.O boss Elon Musk said customers
can now buy the company's electric cars with the digital token.
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