FOREX-Dollar holds gains as oil rout leaves investors on edge

* Dollar holds near two-week peak
* Oil bounce little salve to investor sentiment
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, April 22 (Reuters) - The dollar and yen held
broad gains on Wednesday, as a bounce in oil prices failed to
calm market nerves, with the week's rout and frail fuel demand
underlining a grim outlook for the global economy.
The greenback sat just below a two-week peak against a
basket of peers =USD , and barely budged against commodity
currencies whacked by the oil collapse, even as U.S. crude
CLc1 jumped 20%. O/R
The safe-haven Japanese yen JPY= held at 107.83 per dollar
and both the U.S. currency and yen were steady against the
oil-sensitive Canadian dollar and Norwegian krone. The
Australian dollar AUD= battled to pull ahead, but hit
resistance around $0.6300.
"The bears are certainly getting the upper hand," said Chris
Weston, head of research at Melbourne brokerage Pepperstone,
adding that it was hard to bet against the dollar in such a
climate.
The recovery in U.S. crude lifts it out of negative
territory, but at just shy of $14 a barrel, it is still some 80%
under January's peak as cratering energy consumption due to
coronavirus lockdowns creates a supply glut.
The plunge has soured appetite for risk and seems to have
halted a rebound in stock markets as investors brace for a
longer and slower global economic recovery.
"The oil reality check has triggered a reassessment across
risk assets," said National Australia Bank FX strategist Rodrigo
Catril. "The dollar is again showing its safe haven attributes."
The greenback has gained half a percent this week on a
basket of currencies and stands near multi-week highs against
currencies of oil exporters such as Russia, Norway and Canada.
It advanced against most Asian currencies on Wednesday and
gained most on the New Zealand dollar NZD=D3 , rising about
0.3% to $0.5959 after the Reserve Bank of New Zealand's governor
on Tuesday again raised the prospect of negative rates.
The euro EUR= remained rangebound, holding at $1.0856,
while the British pound GBP= held near a two-week trough after
a gloomy assessment of recovery prospects from the Bank of
England's chief economist.
His evaluation that a swift recovery is by no means certain
comes as countries around the world adopt a cautious approach to
re-opening.
Australia's central bank governor, Philip Lowe, said on
Tuesday that the country is likely to experience its biggest
contraction in output since the 1930s, and that a quick return
to business as usual should not be expected.
"The fall in commodity and equity prices is a signal market
participants expect the world economy to remain weak for some
time, even once the lockdowns are eased," said Commonwealth Bank
of Australia FX analyst Joe Capurso.
"We expect the weak world economy to bear down on the
Australian dollar and for the Aussie to oscillate around $0.6000
in coming months."