* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Iain Withers
LONDON, March 19 (Reuters) - The dollar held its ground
against other major currencies on Friday as investors digested
the U.S. Federal Reserve's pledge this week to look past
inflation and keep interest rates low.
The Fed's loose policy stance on Wednesday triggered a
dollar sell-off and pushed up 10-year Treasury yields to
14-month highs.
But the greenback's losses have since reversed, with the
dollar index last up 0.1% on the day and on track for around a
quarter of a percent gain over the week. =USD
The benchmark U.S. 10-year yield US10YT=RR eased on Friday
to 1.6891%, after hitting a more-than-one-year peak of 1.754% in
the previous session.
The Fed pledged this week to press on with aggressive
monetary stimulus, saying a near-term spike in inflation would
prove temporary amid projections for the strongest U.S economic
growth in nearly 40 years. "The disappointment about the Fed's unchanged dovish
approach only put the dollar under pressure momentarily,"
currency analysts at Commerzbank said in a note.
"Clearly, the majority of market participants considers the
Fed's cautious approach to be justified and assumes that this
supports the economic recovery. That improves the longer-term
economic outlook and therefore justifies higher interest rates
long-term as well as a stronger dollar."
The euro dipped 0.2%, giving up early gains versus the
dollar amid concerns about further coronavirus lockdowns in
Europe, after France imposed a new four-week lockdown from
Friday in 16 regions badly hit by the health crisis. EUR=EBS
The yen was broadly flat after the Bank of Japan widened its
target band for the benchmark yield in a decision that was in
line with market expectations. JPY=EBS "There's no reason for dollar-yen to react to the latest
results of the BOJ assessment because it's almost in line with
what the media reported in advance," said Masafumi Yamamoto,
chief currency strategist at Mizuho Securities.
"For dollar-yen, U.S. Treasury yield change is a much more
important driver than the JGB yield change."
In the cryptocurrency market, bitcoin BTC=BTSP traded at
around $58,000 after briefly topping $60,000 again overnight.
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