* Euro supported as Europe closes gap with U.S. vaccine
drive
* Dollar skids after Treasury yields retreat from 14-month
peaks
* Euro, yen at highest level versus dollar since early March
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Hideyuki Sano and Kevin Buckland
TOKYO, April 20 (Reuters) - The dollar sank to a fresh
6-1/2-week low against major peers on Tuesday as the euro led a
rally on the back of a brightening outlook for the region's
vaccination programme.
The dollar had already been losing traction as U.S. bond
yields retreated from a 14-month peak touched last month,
reducing the greenback's yield allure.
The euro rose as high as $1.20715 EUR=EBS for the first
time since March 3, while the British pound touched a fresh
one-month high at $1.40090 GBP=D4 , building on a 1% jump
overnight.
Some analysts say 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 . "Europe is really the main region which is going to see
accelerating vaccinations this quarter. And later in the year,
we will see accelerating vaccinations, broadly, in emerging
market economies," said Zach Pandl, co-head of foreign exchange
strategy for Goldman Sachs in New York.
"The U.S. got ahead of the curve in the first quarter, but
other countries are going to be quickly catching up."
The dollar index dropped as low as 90.877 =USD , the
weakest since March 3, having lost some 2.7% from its five-month
peak at 93.439 hit last month.
The U.S. currency fell to as low as 107.975 yen JPY=EBS ,
its weakest in more than six weeks.
The moves are the reverse of what was happening in the first
three months of the year, when the dollar gained against the
very same major currencies as yields rose on U.S. Treasuries and
offered higher returns on the greenback.
At that time, bond investors bet that massive fiscal
stimulus in the United States would spur faster inflation,
leading to an earlier exit from the Federal Reserve's monetary
easing programme.
But repeated assurances from Fed policymakers this month
that near-term price pressures will be transitory seem to have
soothed markets.
"I think that people are quite comfortable ... that the
dollar is likely to be weaker structurally for longer," said
Andrew Gillan, a portfolio manager at Janus Henderson Investors.
"And I don't think we've seen enough evidence yet of that
changing, even with a little bit of recent strength."
The 10-year U.S. Treasuries yield hit a one-month low of
1.529% last week. Though it ticked up to 1.615% on Tuesday, it
stood well below its March peak of 1.776%.
"One of the probably most important developments in macro
markets over the last month has been a stability in U.S. rates,"
said Goldman's Pandl.
"That also opens up room for dollar weakness against a broad
set of currencies."
The Australian dollar rose as high as $0.7800 AUD=D4 for
the first time in a month after Reserve Bank of Australia
policymakers said in minutes of their meeting this month that
the country's economic recovery has surpassed all expectations,
with an "above-trend" expansion likely this year and next.
The offshore Chinese yuan firmed to as strong as 6.4885 per
dollar CNH=EBS , also a one-month high.
In cryptocurrencies, bitcoin slipped to around $55,000
BTC=BTSP , on track for a fifth straight day of losses.
It sank as low as $51,541.16 on Sunday, after hitting a
record high of $64,895.22 just days earlier.
Despite the retreat, the digital token has still almost
doubled in value so far this year, after more than quadrupling
in 2020.
"The recent drop in price for BTC definitely damaged the
technical picture: The old resistance level around $60,000
should have held up and catch the decline, but it did not,"
Julius de Kempenaer, senior technical analyst at
Stockcharts.com, said by email.
However, the "long-term trend for BTC -- and crypto in
general -- seems unharmed."
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Currency bid prices at 501 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2064 $1.2036 +0.22% -1.27% +1.2072 +1.2038
Dollar/Yen JPY=EBS 108.1450 108.1400 -0.03% +4.67% +108.3020 +107.9750
Euro/Yen
Dollar/Swiss CHF=EBS 0.9140 0.9153 -0.17% +3.28% +0.9156 +0.9138
Sterling/Dollar GBP=D3 1.4004 1.3989 +0.10% +2.50% +1.4007 +1.3977
Dollar/Canadian CAD=D3 1.2488 1.2531 -0.32% -1.91% +1.2529 +1.2490
Aussie/Dollar AUD=D3 0.7798 0.7755 +0.55% +1.36% +0.7799 +0.7755
NZ NZD=D3 0.7214 0.7180 +0.44% +0.42% +0.7218 +0.7180
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX
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World FX rates https://tmsnrt.rs/2RBWI5E
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