FOREX-Dollar slips to 4-week low hurt by recent retreat in yields

Reuters

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    * Greenback set for 0.7% drop this week 
    * U.S. says Vietnam, Switzerland and Taiwan violate currency
thresholds

 (Updates prices, market activity, comments to U.S. market open;
changes dateline, previous LONDON)
    By Saqib Iqbal Ahmed and Ritvik Carvalho
    NEW YORK, April 16 (Reuters) - The dollar slipped to a
4-week low against a basket of currencies on Friday, still
smarting from a sharp drop in Treasury yields the previous
session, and as investors increasingly bought into the Federal
Reserve's insistence it would keep an accommodative policy
stance for a while longer.
    The benchmark 10-year U.S. Treasury yield  US10YT=RR  dipped
to a one-month low of 1.528% overnight, moving further away from
March's 1.776%, its highest in more than a year, even in the
face of Thursday's stronger-than-expected retail sales and
employment data. On Friday, the 10-year recovered some ground to
trade at 1.5816%.  urn:newsml:reuters.com:*:nL1N2M82FC
    "It's a little bit of a change of course," said Minh Trang,
senior FX trader at Silicon Valley Bank.
    Trang cited some profit-taking after the greenback's sharp
appreciation in March as well as the recent retreat in Treasury
yields as main reasons for the dollar's weakness.
    Investors' healthy appetite for riskier assets such as
equities has also sapped some of the safe-haven demand the
dollar typically enjoys, Trang said.
    Some market participants expect the dollar weakness to
persist.
    "My best guess is the 10-year Treasuries won’t move a great
deal from here over the coming quarter and that sets the
backdrop for the recent dynamics we’ve seen, with dollar
weakness continuing much of this current quarter," Colin Asher
senior economist at Mizuho said.
    The dollar index  =USD  measuring the greenback against a
basket of six currencies was 0.129% lower at 91.545, its lowest
since March 18. For the week the index was down 0.7%, set for
its second straight weekly decline.
    San Francisco Fed President Mary Daly said the U.S. economy
was still far from making "substantial progress" toward the
central bank's goals of 2% inflation and full employment, the
bar the Fed has set for beginning to consider reducing its
support for the economy.  urn:newsml:reuters.com:*:nS0N2JQ02J
    That echoed Fed Chair Jerome Powell's comments in several
speeches over the past week that policymakers will look through
near-term rises in prices amid ongoing slack in the labour
market.
    On Friday, the U.S. Treasury Department said it will
continue enhanced engagement with Vietnam and Switzerland, and
initiate similar talks with Taiwan after concluding all three
countries met the criteria under a 2015 U.S. currency
manipulation law.  urn:newsml:reuters.com:*:nL1N2M9129
    The Canadian dollar strengthened against its U.S.
counterpart on Friday, turning higher for the week, as higher
oil prices and a broader decline for the greenback offset
domestic data showing a bigger-than-expected drop in wholesale
trade.  urn:newsml:reuters.com:*:nL1N2M9152
    In cryptocurrencies, bitcoin  BTC=BTSP  stood around
$61,521.57, below the record high of $64,895 reached on
Wednesday, when cryptocurrency platform Coinbase  COIN.O  this
week made its debut in Nasdaq in a direct listing.  urn:newsml:reuters.com:*:nL4N2M73OE

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World FX rates    https://tmsnrt.rs/2RBWI5E
Dollar set for second weekly loss    https://tmsnrt.rs/3mTL4Dv
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 (Reporting by Saqib Iqbal Ahmed in New York and Ritvik Carvalho
in London; additional reporting by Sujata Rao in London and
Kevin Buckland in Tokyo; editing by Larry King, Kirsten Donovan)
 ((Ritvik.Carvalho@thomsonreuters.com; +44 2075429406; Reuters
Messaging: ritvik.carvalho.thomsonreuters@reuters.net; Twitter
@ritvikcarvalho))

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