FOREX-Dollar rebounds as U.S. yields rise; Fed, Biden speech eyed

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

By Saikat Chatterjee
LONDON, April 28 (Reuters) - The U.S. dollar edged higher
on Wednesday as investors moved to the sidelines ahead of a U.S.
Federal Reserve policy statement and a speech by Joe Biden later
in the day where the U.S. president is set to announce more
stimulus plans.
Though the greenback recovered from a one-month low hit
earlier this week, investors expect the U.S. central bank to
maintain its policy settings and Fed Chairman Jerome Powell is
seen as likely to repeat his dovish message. The dollar index rose 0.2% at 91.047 =USD , bouncing from
Monday's low of 90.679, its weakest level since March 3, though
investors were not convinced a recent downtrend had ended.
The greenback's gains were also bolstered by higher U.S.
Treasury yields US10YT=RR with benchmark yields on 10-year
notes rising above 1.60% after tepid auction results. US/
Investors' inflation expectations, measured by the
break-even inflation rate calculated from U.S. inflation-linked
bonds US10YTIP=TWEB , rose above 2.40% on Tuesday, the highest
level since 2013.
But analysts expect the Fed will remain unperturbed by the
prospects of more stimulus plans and rising inflation
expectations, holding the prospect of more losses for the
greenback in the coming weeks.
"We still expect Powell to remain ultra-dovish and emphasise
the long period ahead in which the Fed plans to maintain loose
monetary policy, which will leave open the prospect of further
USD weakness," MUFG strategists said.
The euro slipped 0.2% to $1.2070 EUR=EBS , off Monday's
two-month high of $1.2117.
The dollar stood at 108.97 yen JPY=EBS , having jumped
0.59% overnight and extending its recovery from a seven-week low
of 107.48 touched last week, in tandem with rises in U.S. bond
yields.
Biden is expected to roll out a plan to raise taxes on the
wealthiest Americans, including the largest-ever increase in
levies on investment gains, to fund about $1 trillion in
childcare and other social spending. Elsewhere, the Australian dollar AUD=D4 dropped 0.3% to
$0.77415 after the country's consumer price index came in weaker
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World FX rates https://tmsnrt.rs/2RBWI5E
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