FOREX-Dollar edges up before U.S. inflation data

* Dollar index edges up
* Euro, Aussie and Kiwi dollars slip
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

(Updates prices, adds detail and comment)
By Elizabeth Howcroft
LONDON, April 13 (Reuters) - The dollar edged higher on
Tuesday, helped by a pick-up in U.S. Treasury yields, while
riskier currencies dipped, as markets waited for inflation data
in the United States.
The dollar has fallen in April so far, after surging in the
first three months of 2021 on expectations that a combination of
monetary stimulus and government spending would cause inflation
to spike.
U.S. CPI data for March is due at 1230 GMT and is expected
to show a rise in inflation.
Markets will also be paying attention to how yields react to
a 30-year Treasury auction. The inflation figure alone was unlikely to move the dollar,
said Ned Rumpeltin, head of European currency strategy at TD
Securities, but any reaction in U.S. yields could create a
knock-on effect on currency markets, particularly in the
dollar-yen pair.
At 1103 GMT, the dollar was up 0.1% against a basket of
currencies, at 92.221 =USD , moving away from recent three-week
lows.
Dollar-yen was down 0.2% at 109.150 JPY=EBS .
The 10-year U.S. Treasury yield was at 1.6677% US10YT=RR ,
still well below the 1.7760% level reached on March 30, which
was the highest in over a year.
"There's a widespread expectation that inflation is set to
rise in the coming months, but also a consensus for the most
part that this will be a transitory phenomenon," Deutsche Bank
strategist Jim Reid wrote in a note.
Likewise, Rumpeltin said that the inflation number could be
driven by factors other than demand.
"If there are supply-chain problems and the costs are rising
because of it, that's not really inflation in my book," he said.
Worries that the U.S. Federal Reserve would scale back - or
"taper" - its quantitative easing programme was seen as the
biggest risk among investors in BofA's fund manager survey
released on Tuesday.
Overnight data showed China's exports rose in March, with
import growth rising to four-year highs, signalling an
improvement in global demand. Asian stock markets were broadly positive after the data,
but the boost did little to support currency markets. In London
trading, China's offshore yuan was down 0.1% against the dollar,
changing hands at 6.5536 CNH=EBS .
The euro was down 0.2%, at $1.18935, with European shares
just below all-time highs. The Australian dollar, which is seen as a liquid proxy for
risk appetite, was down 0.2% versus the U.S. dollar at 0.7609
AUD=D3 .
On Monday, Australia abandoned its goal to vaccinate nearly
all its population by the end of 2021. The New Zealand dollar was steady NZD=D3 . The Reserve Bank
of New Zealand is due to meet on Wednesday and is expected to
keep rates constant. Elsewhere, Bitcoin BTC=BTSP hit a record of $62,741 on
Tuesday, extending its 2021 rally to new heights a day before
the listing of Coinbase shares in the United States.
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