* Dollar index falls back to early March lows
* Euro gets extra lift late in the day
* U.S. yields languish as Fed meeting next week comes into focus
* Biden tax plan hammers cryptocurrencies
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Revises with updated market action prices, comments)
By David Henry
NEW YORK, April 23 (Reuters) - The dollar fell against major currencies on Friday as U.S. yields
languished and the euro got an extra late-day lift following a earlier boost from an upbeat survey of
purchasing managers.
The dollar index =USD fell 0.5% to 90.8080, a level not seen since early March, after the euro
EUR=EBS climbed 0.7% to $1.2098, pushing through its earlier high for the week.
More than half of the euro's appreciation came late in the day after the market digested earlier
economic news.
"This is thin markets on a Friday afternoon," said Marc Chandler, chief market strategist at Bannockburn
Global Forex in New York. "The euro making new highs for the week late in the day suggests it is going to
have momentum into next week."
The exaggerated move came after the markets saw a European purchasing managers' index for April come in
better than expected, supporting the view that the region's economic recovery is accelerating and won't keep
lagging so far behind the U.S. recovery. A similar U.S. survey showed factory activity powered ahead in April. Another report said new home sales
in the United States jumped 21% in March. Both affirmed that the economy was being lifted by government
stimulus and increased vaccinations against the coronavirus. The U.S. survey results were tempered by manufacturers reporting increased struggles to get raw
materials and other supplies for production.
Yields on 10-year U.S. Treasuries traded in a narrow range through the news and were at 1.56% late in
the day, about four basis points lower than at the start of the week. Until the late-day boost to the euro, Chandler said Friday's major currency markets were largely "a
continuation of what we have seen since the beginning of the month," with the dollar losing much that it had
gained earlier in the year as yields climbed to 1.75% on March 31.
"The dollar had a very strong first quarter and the market is still unwinding that," Chandler said.
The dollar in the first quarter gained 3.6% but it has lost about 2.6% so far in April.
Markets now are looking toward next week's meeting of the U.S. Federal Reserve Open Market Committee to
review monetary policy and the economy.
Fed Chair Jerome Powell is expected to echo Thursday's message from European Central Bank President
Christine Lagarde that scaled back some expectations for a withdrawal of monetary easing. Powell's remarks could put more downward pressure on Treasury yields and limit any bounce of the dollar.
Auctions of U.S. Treasuries next week are not likely to be big factor, Shaun Osborne, chief currency
strategist at Scotiabank told the Reuters Global Markets forum on Friday.
"There still appears to be good demand for Treasury product," Osborne said.
"The FOMC will likely be the highlight of a busy data week for the U.S.," Osborne said.
Overall, he expects that "low yields, low volatility plus strengthening global growth should drive
diversification away from the USD to riskier assets."
The Australian AUD=D3 and New Zealand dollars NZD=D3 firmed on Friday, but traders said risks are
pointed to the downside due to the recent weakening in commodity prices.
The British pound rose 0.3% on the day. GBP=D3 .
Bitcoin and other cryptocurrencies trimmed some losses that had come out of concern that U.S. President
Joe Biden's plan to raise capital gains taxes will curb investment in digital assets. Bitcoin, the biggest
and most popular cryptocurrency BTC=BTSP , slumped as much as 5% and fell below $50,000 for the first time
since early March. It was down 1.5% to $50,932 at 21495 GMT. Smaller rival Ether ETH=BTSP was down fell
about 2%. Currency bid prices at 3:41PM (1941 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 90.8080 91.2870 -0.52% 0.919% +91.2940 +90.8080
Euro/Dollar EUR=EBS $1.2098 $1.2016 +0.69% -0.98% +$1.2099 +$1.2013
Dollar/Yen JPY=EBS 107.8850 107.9650 -0.07% +4.41% +108.1400 +107.4800
Euro/Yen EURJPY= 130.52 129.72 +0.62% +2.84% +130.5600 +129.6000
Dollar/Swiss CHF=EBS 0.9129 0.9169 -0.43% +3.19% +0.9173 +0.9129
Sterling/Dollar GBP=D3 $1.3888 $1.3842 +0.33% +1.65% +$1.3895 +$1.3836
Dollar/Canadian CAD=D3 1.2469 1.2503 -0.25% -2.07% +1.2509 +1.2466
Aussie/Dollar AUD=D3 $0.7759 $0.7708 +0.67% +0.86% +$0.7760 +$0.7693
Euro/Swiss EURCHF= 1.1043 1.1015 +0.25% +2.18% +1.1052 +1.1017
Euro/Sterling EURGBP= 0.8710 0.8680 +0.35% -2.54% +0.8718 +0.8673
NZ NZD=D3 $0.7202 $0.7166 +0.53% +0.31% +$0.7203 +$0.7151
Dollar/Dollar
Dollar/Norway NOK=D3 8.2840 8.3835 -1.03% -3.38% +8.3625 +8.2970
Euro/Norway EURNOK= 10.0236 10.0507 -0.27% -4.24% +10.0625 +10.0211
Dollar/Sweden SEK= 8.3801 8.4263 +0.08% +2.24% +8.4615 +8.3800
Euro/Sweden EURSEK= 10.1394 10.1314 +0.08% +0.63% +10.1551 +10.1155
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