FOREX-Dollar pulls away from 11-week lows as euro, commodity currencies sag

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Euro sags as Trump considers sanctions over Russia gas
pipeline
* Brexit woes weigh on pound, crude oil slump hits Aussie,
loonie
* Dollar takes increasing Fed rate cut expectations in
stride

By Shinichi Saoshiro
TOKYO, June 13 (Reuters) - The dollar held its gains early
on Thursday after rebounding from 11-week lows, as peers such
as the euro, pound and commodity currencies sagged due to
troubles of their own.
The dollar index .DXY versus a basket of six major
currencies was steady at 96.957 after rising more than 0.3%
overnight.
The index had dropped to 96.459 on Monday, its lowest since
late March, following a sharp decline in long-term U.S. Treasury
yields, which fell to near two-year lows last week after a soft
U.S. jobs report bolstered expectations for an interest rate cut
by the Federal Reserve.
Weakness in other currencies, however, underpinned the
dollar's latest bounce despite mounting expectations that the
Fed could ease monetary policy in the next few months.
The euro took a hit after U.S. President Donald Trump said
on Wednesday he was considering sanctions over Russia's Nord
Stream 2 natural gas pipeline project and warned Germany against
being dependent on Russia for energy. Sterling slipped as British lawmakers on Wednesday defeated
an attempt led by the opposition Labour Party to try to block a
no-deal Brexit. "Thanks to the poor performance of European currencies, the
dollar has managed to rise although the latest inflation data
enhanced Fed rate cut expectations," said Takuya Kanda, general
manager at Gaitame.Com Research Institute.
"The market now considers monetary easing by the Fed as a
foregone conclusion. At the end of the day, the dollar will
still remain a relatively high yielding currency even after a
rate cut or two."
Data released on Wednesday showed U.S. consumer prices
barely rose in May, pointing to moderate inflation that together
with a slowing economy increased pressure on the Fed to lower
interest rates this year. The euro was a shade higher at $1.1293 EUR= after
retreating 0.35% overnight, while the pound stood little changed
at $1.2692 GBP=D4 following a loss of 0.3% on Wednesday.
The dollar was also buoyed as commodity-linked currencies
were pressured by a slump in crude oil prices.
The Canadian dollar CAD=D4 was little changed at C$1.3337
per dollar after shedding roughly 0.5% the previous day.
The Australian dollar AUD=D4 traded near a 12-day low of
$0.6925 plumbed on Wednesday, when it shed 0.45%.
Oil prices tumbled 4% on Wednesday to their lowest
settlements in nearly five months, weakened by another
unexpected rise in U.S. crude stockpiles and by a dimming
outlook for global oil demand. O/R
The dollar was flat at 108.520 yen JPY= , confined to a
tight range after ending the previous day unchanged.

(Editing by Shri Navaratnam)