FOREX-Dollar supported by strong U.S. data, higher Treasury yields

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Dollar index hovers near 2-week high
* Strong U.S. housing, employment-related data supports
greenback

By Shinichi Saoshiro
TOKYO, May 17 (Reuters) - The dollar hovered near a two-week
high against its peers on Friday, supported by strong U.S.
economic data and a bounce in Treasury yields.
The dollar index versus a basket of six major currencies
.DXY was at 97.832 after reaching 97.882 on Thursday, its
highest since May 3.
The greenback reached the two-week peak on robust U.S.
housing data and a weekly jobless claims report which pointed to
sustained labour market strength for the world's biggest
economy. The U.S. currency also drew strength as its counterparts
such as the euro and pound were confronted with a number of
bearish factors.
"The euro is weighed down as the (euro) zone is saddled with
weak economic fundamentals and Italian political concerns, while
its all about Brexit for the pound," said Junichi Ishikawa,
senior FX strategist at IG Securities in Tokyo.
Italy's right-wing League party will "tear apart" European
Union rules which are "strangling" the country if it scores well
in a May 23-26 European parliamentary election, Italian Deputy
Prime Minister Matteo Salvini said on Thursday. The euro was steady at $1.1175 EUR= after falling to
$1.1166 overnight, its lowest since May 6. The single currency
has shed 0.55% this week.
Britain faces a potentially disorderly exit from the
European Union as Prime Minister Theresa May has struggled to
keep her Brexit deal and her premiership.
The possibility of a chaotic departure from the EU has
pushed the pound to a three-month trough of $1.2788 GBP=D4 on
Thursday. Sterling last stood at $1.2796, having slumped 1.5%
this week.
The dollar was nearly flat at 109.850 JPY= after gaining
0.2% the previous day.
Against the safe-haven yen the greenback fell to a
3-1/2-month low of 109.020 at the start of the week when a trade
war between the United States and China intensified.
The Australian dollar was steady at $0.6891 AUD=D4 .
The Aussie was in close reach of a 4-1/2-month trough of
$0.6886 plumbed on Thursday after soft domestic employment data
heightened expectations for an interest rate cut by the Reserve
Bank of Australia.
The 10-year U.S. Treasury note US10YT=RR yielded 2.396%,
having pulled back from a near two-month low of 2.354% brushed
the previous day.