FOREX-Dollar slips as profit-taking, falling yields bite

* IMF upgrades global growth outlook
* U.S. yields slide as Fed rate hike pricing deemed too
aggressive

(Updates prices, market activity, comments to U.S. market open;
changes dateline, previous LONDON)
By Saqib Iqbal Ahmed and Saikat Chatterjee
NEW YORK, April 6 (Reuters) - The U.S. dollar slipped to a
two-week low against a basket of currencies on Tuesday, as
traders booked profits after a strong March and as a fall in
Treasury yields from recent peaks put pressure on the U.S.
currency.
The U.S. Dollar Currency Index =USD , which measures the
greenback against a basket of six currencies, was 0.146% lower
at 92.427, its lowest since March 24.
The dollar has risen this year, along with Treasury yields,
as investors bet the United States would recover more quickly
from the pandemic than other developed nations, amid massive
stimulus and aggressive vaccinations. At 2.5%, the gain in March
was the dollar's biggest monthly increase since the end of 2016.
"I think we are seeing some profit taking to start the new
quarter," John Doyle, vice president of dealing and trading at
FX payments firm Tempus Inc, said.
"Treasury yields have played a role in helping the dollar
find its footing. Lower yields today would add fuel to the
equity fire and diminish demand for the greenback too."
U.S. Treasury yields fell on Tuesday, while U.S. stocks
edged to a fresh high, further sapping demand for the safe-haven
U.S. currency.
Against the Japanese yen, the dollar slipped 0.28% to 109.87
yen, a one-week low.
The International Monetary Fund raised its outlook for
global economic growth again on Tuesday, forecasting worldwide
output would rise 6% this year, reflecting a rapidly brightening
outlook for the U.S. economy. The upbeat assessment follows an encouraging U.S. jobs
report on Friday and a solid U.S. services activity reading on
Monday.
"The dollar is likely to find continued support from the
notion that the world's biggest economy appears to be in the
early innings of a vaccine- and stimulus-fueled economic boom,"
Joe Manimbo, senior market analyst at Western Union Business
Solutions, said in a note.
Speculators' net bearish bets on the U.S. dollar fell in the
latest week to the lowest since June 2020, calculations by
Reuters and U.S. Commodity Futures Trading Commission data
released on Friday showed. Sterling slipped on Tuesday as investors withdrew some cash
after cable jumped to its highest in more than two weeks, while
traders continued to bet on a speedy re-opening of the British
economy. Major cryptocurrency Etheruem ETH=BTSP reached a peak of
$2,151.63 on Tuesday, before giving up the day's gains.
The rise of Ethereum, which like most smaller
cryptocurrencies tends to move in tandem with bitcoin, has
helped the cryptocurrency market capitalization reach a record
$2 trillion on Monday, data and market trackers CoinGecko and
Blockfolio showed.

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