* Dollar index falls to lowest since March 3
* Euro, Aussie and Kiwi dollars strengthen
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Updates prices, adds comment)
By Elizabeth Howcroft
LONDON, April 20 (Reuters) - The dollar steadied in the
European session, after hitting its lowest in nearly seven weeks
during the Asian session, helped by optimism about the pace of
vaccine rollout in Europe and U.S. Treasury yields remaining
below their March spikes.
The dollar has fallen so far in April as U.S. bond yields
retreated from the 14-month highs touched last month. The moves
are a reverse of what happened in the first quarter of the year,
when the dollar strengthened as U.S. Treasury yields rose,
offering higher returns on the greenback.
At 1158 GMT, the dollar index was flat on the day at 91.043,
after hitting a low of 90.877 during the Asian session =USD .
The euro was up 0.2% at $1.2056 - its highest in nearly
seven weeks - after having passed the key $1.20 in the previous
session.
Commerzbank strategist You-Na Park-Heger wrote in a note to
clients that the recent fall in the dollar is due to the U.S.
Federal Reserve's reassuring the market that it will not end its
monetary stimulus anytime soon, while an improving vaccine
situation in Europe is supporting the euro. But she said that
the situation could rapidly change.
"The economic recovery in the U.S. might drive up inflation
expectations further, fuelling rate hike speculation. The news
situation in the euro zone in connection with corona might
change again as uncertainty remains high," she said.
Some analysts said the support for the euro likely came from
the announcement that the European Union has secured an
additional 100 million doses of COVID-19 vaccine by BioNTech
22UAy.DE and Pfizer PFE.N . Global markets turned more cautious during the session, with
Wall Street futures slipping as investors turned to results from
Netflix NFLX.O and other major technology-related companies
this week to sustain the positive start to the earnings season.
“I wouldn't be surprised if U.S. equities back off a bit
more this afternoon, euro-dollar goes under $1.20 for a bit ...
just because this has now been quite a quick move, to here,"
said Kit Juckes, head of FX strategy at Societe Generale.
Versus the yen, the dollar broke the 108 level overnight,
before reversing course, up 0.2% on the day at 108.410
JPY=EBS .
"USD/JPY is one G10 currency pair which has still not fully
retraced the move higher from March when it started the month
trading closer to the 106.00-level," Lee Hardman, currency
analyst at MUFG, said in a note to clients.
The Australian dollar strengthened to a one-month high of
0.7816, helped by minutes from the Reserve Bank of Australia's
April meeting, which showed the central bank expects a faster
rebound from the pandemic. At 1202 GMT it was at 0.7778, up 0.3% on the day AUD=D3 .
The New Zealand dollar was up 0.3% at 0.72005 NZD=D3 .
Oil prices edged higher on Monday, supported by a weaker
U.S. dollar but gains were capped by concerns about the impact
on demand from rising coronavirus cases in India. The commodity-linked Norwegian crown hit its strongest since
2018 versus the dollar, and also reached its strongest since
January 2020 versus the euro NOK=D3 EURNOK=D3 .
Bitcoin was up 1%%, trading at around $56,220 BTC=BTSP . It
sank as low as $51,541.16 on Sunday, after hitting a record high
of $64,895.22 just days earlier.
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