* Robust U.S. data helps dollar
* Investors take profits on short dollar bets
* Euro posts best month since July 2020
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Adds comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, April 30 (Reuters) - The dollar rose on Friday, extending gains after upbeat data on personal
income, spending, and manufacturing in the U.S. Midwest, with market participants also taking profits on the
currency's short dollar positions this month.
The dollar index was down 2.1% for the month of April, its largest monthly loss since December.
Next week's U.S. data, which includes non-farm payrolls for April and key U.S. manufacturing and
services indexes, should reinforce expectations of a strong recovery from the pandemic by the world's
largest economy.
"Another round of potentially strong data in the U.S. may add pressure to start discussing tapering,"
said ING in its latest research note.
"With some possible fresh weakness in Treasuries on the way, the U.S. dollar might find some respite
against the low-yielders," the bank added.
After the Fed's policy meeting on Wednesday, Fed Chair Jerome Powell acknowledged the U.S. economy's
growth, but said there was not enough evidence of "substantial further progress" toward recovery to warrant
a change to its ultra-loose monetary settings. Friday's data showing a 4.2% rebound in U.S. consumer spending in March, amid a 21.1% surge in income as
households received additional COVID-19 relief money from the government, supported the dollar. That led to
a 0.4% rise in the core personal consumption expenditures (PCE) index, compared with a gain of 0.3% the
previous month. "Powell remained firm on the Fed's interest rate path and QE (quantitative easing) program on Wednesday,
leaving traders with the uncomfortable feeling inflation could run away - and run away quickly," Adam
Corbett, currency analyst, at Cambridge Global Payments, said in a research note after the data.
Similarly, the dollar also gained after the Chicago Purchasing Management Index (PMI) showed a reading
for April of 72.1, the highest in almost four decades.
In afternoon trading, the dollar index =USD ended the week up 0.5%. It was last up 0.7% at 91.263, the
largest daily gain since late February.
"The current strength in the dollar is likely a pivot to the seasonal trend that we tend to see in May
and June," said Mazen Issa, senior currency strategist at TD Securities in New York, after the greenback's
underperformance this month. He added that April is typically one of the weaker months for the dollar.
The Canadian dollar CAD=D3 climbed to a more-than three-year high of C$1.2266 per greenback on Friday,
on track for a 1.6% weekly gain that would be its biggest since early November. The U.S. dollar was last
flat at C$1.2276.
In contrast to the Fed's dovishness, the Bank of Canada has already begun to taper its asset purchases.
Canada's commodity-linked loonie got additional support from a surge in oil to a six-week peak, along with
higher lumber prices.
The euro EUR=EBS traded 0.8% lower at $1.2025, posting its largest daily percentage fall since late
February. But it was up 2.5% for the month versus the dollar, its best monthly showing since July 2020.
The dollar also rose against the yen, up 0.3% at 109.29 JPY=EBS , rising 1% for the week. But it was
down 1.3% for the month, its worst monthly showing since July 2020 as well.
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Currency bid prices at 3:01PM (1901 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 91.2580 90.6200 +0.71% 1.419% +91.3110 +90.5880
Euro/Dollar EUR=EBS $1.2024 $1.2122 -0.80% -1.58% +$1.2127 +$1.2018
Dollar/Yen JPY=EBS 109.2950 108.9150 +0.37% +5.80% +109.3400 +108.7100
Euro/Yen EURJPY= 131.42 131.99 -0.43% +3.55% +132.1900 +131.3800
Dollar/Swiss CHF=EBS 0.9134 0.9089 +0.51% +3.26% +0.9136 +0.9082
Sterling/Dollar GBP=D3 $1.3810 $1.3946 -0.97% +1.08% +$1.3958 +$1.3804
Dollar/Canadian CAD=D3 1.2279 1.2278 +0.01% -3.57% +1.2322 +1.2266
Aussie/Dollar AUD=D3 $0.7705 $0.7766 -0.77% +0.18% +$0.7784 +$0.7704
Euro/Swiss EURCHF= 1.0981 1.1013 -0.29% +1.61% +1.1022 +1.0976
Euro/Sterling EURGBP= 0.8704 0.8691 +0.15% -2.61% +0.8717 +0.8682
NZ NZD=D3 $0.7158 $0.7243 -1.14% -0.29% +$0.7254 +$0.7160
Dollar/Dollar
Dollar/Norway NOK=D3 8.3115 8.1895 +1.48% -3.21% +8.3220 +8.1820
Euro/Norway EURNOK= 9.9964 9.9355 +0.61% -4.50% +10.0164 +9.9215
Dollar/Sweden SEK= 8.4595 8.3705 +0.26% +3.21% +8.4642 +8.3620
Euro/Sweden EURSEK= 10.1724 10.1460 +0.26% +0.95% +10.1817 +10.1385
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World FX rates https://tmsnrt.rs/2RBWI5E
Dollar heads for fourth weekly loss https://tmsnrt.rs/3b8GtJl
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