FOREX-US dollar falls as lockdown eases and traders turn less averse to risk

* Japanese yen rises to 2-week high vs US dollar
* Australian dollar jumps to 7-week high vs US dollar
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Olga Cotaga
LONDON, April 27 (Reuters) - The U.S. dollar fell across the
board on Monday as traders turned more positive and less averse
to risk amid an easing in coronavirus lockdown restrictions in
several countries.
The U.S. dollar was weaker against the Japanese yen and the
euro as investors turned slightly more positive on Italy and saw
the Bank of Japan continuing to support an economy battered by
the virus.
Credit rating agency S&P reaffirmed on Friday Italy's BBB
rating, in spite of what many had expected - a downgrade -
supporting the common currency as this limits the escalation of
an economic and political crisis on the continent. The BoJ expanded its stimulus to help companies hit by the
coronavirus crisis, pledging to buy unlimited amount of bonds to
keep borrowing costs low as the government tries to spend its
way out of the deepening economic pain. The dollar shed 0.3% of its value versus the Japanese yen to
trade at 107.23 yen JPY=EBS , having fallen earlier to a
two-week low of 106.93.
The euro was up 0.2% at $1.0842 EUR=EBS .
Traders now shift their focus to a U.S. Federal Reserve
meeting ending Wednesday and a European Central Bank (ECB)
meeting on Thursday as major central banks once again take the
stage as the global economy battles against a deep depression.
The Fed has already announced a raft of measures and is
expected to stay on hold this week, which is unlikely to trouble
the dollar, analysts say.
The stakes are higher for the euro, because the ECB is
likely to extend its debt purchases to include junk bonds, and
some investors are worried this decision could widen rifts
between members of the European Union.
On Sunday, the Australian states of Queensland and Western
Australia said they would slightly ease social distancing rules
this week as the number of people infected decreased on the
continent, pushing the Australian dollar to a seven-week high of
0.6469 against the U.S. dollar AUD=D3 .
Encouraged by a fall in infection rates, Germany also has
allowed on Sunday small retail stores to reopen, provided they
adhere to strict distancing and hygiene rules. Now large
corporations are following suit. Italy will also ease lockdown measures from May 4.
These measures, alongside with more positive COVID-19 data,
has turned investors more risky, forcing them to abandon the
safety net of greenback, analysts said. A Reuters index which
tracks the dollar against other major currencies fell below 100
for the first time since Wednesday.
"The U.S. dollar has started the week on the back foot... It
reflects more risk on trading conditions at the start of this
week," said Lee Hardman, currency analyst at MUFG.
"Most notably there was a sharp drop yesterday in the
reported number of COVID-19 fatalities in a number of countries
including France, Italy, Spain, and the UK which provides
further encouragement that lockdown measures are proving
effective," Hardman said.