FOREX-Dollar firms as risk appetite ebbs; data eyed

Reuters

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    * Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

    By Saikat Chatterjee
    LONDON, May 4 (Reuters) - The U.S. dollar extended gains on
Tuesday, partially unwinding a  month-long decline as risk
appetite faded with investors awaiting upcoming data and policy
speeches for clues.
    With major stock indices treading water and bond yields
firming slightly, the dollar's safe-haven appeal received a
further boost in London trading.
    "The dollar is trading generally firmer, reflecting a mild
bout of risk aversion across assets," Scotiabank strategists
said in a daily note.
    Tuesday's bounce reversed losses sustained on Monday after a
disappointing U.S. manufacturing survey report, leaving it 1%
above a one-month low struck last week. 
    Though April's headline survey numbers were lower than
March, the U.S. recovery remained firmly on track with price
pressures rising, while the Federal Reserve appeared to be in no
hurry to tighten.
    Financial conditions are nowhere near the level where the
Fed would consider pulling back its support, New York Fed Bank
President John Williams said on Monday, despite the economy
being set to grow at the fastest rate in decades this year as it
rebounds from the crisis caused by the coronavirus pandemic.
 urn:newsml:reuters.com:*:nL1N2MQ25Z
    Commerzbank strategists said U.S. data due for durable goods
orders and non-farm payrolls will provide further evidence of
the economic recovery.
    "However, as the market expectations are a bit too
optimistic according to our experts it might put pressure on the
dollar despite principally positive results," they said.
    The dollar index  =USD , which measures the dollar's value
against a basket of other major currencies, climbed 0.4% to
91.34, just shy of a near two-week high. It fell more than 2% in
April.
    Most of its gains were notched up against the Antipodean
currencies, chiefly the Australian dollar  AUD=D3  even though
commodity prices were generally firmer across the board.    
    The greenback advanced 0.6% versus the Antipodean currencies
and 0.3% against the yen, euro and pound in trade thinned by
holidays in China and Japan. 
    The Aussie dollar weakened as the country's central bank
sharply upgraded forecasts for the local economy yet still
predicted no tightening in its super-loose policy until at least
2024.  urn:newsml:reuters.com:*:nL4N2MR06E
    Sterling  GBP=D3  dipped marginally to $1.3870 ahead of a
Bank of England meeting on Thursday. Analysts reckon the bank
might announce a slowdown in its bond buying programme as the
vaccine rollout bolsters Britain's economy.
    Elsewhere cryptocurrency ether  ETH=BTSP  powered to another
record peak, this time nearing $3,500 as speculators drive
white-hot crypto markets higher. It last sat at $3,313.     

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World FX rates    https://tmsnrt.rs/2RBWI5E
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 (Reporting by Saikat Chatterjee; Editing by Simon
Cameron-Moore, Kirsten Donovan)
 ((saikat.chatterjee@thomsonreuters.com; +44-20-7542-1713;
Reuters Messaging: saikat.chatterjee.reuters.com@reuters.net))

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