* Dollar index hits more than one-week high
* Fed says it will let bank ratio expire on March 31
* BoJ widens its target band for 10-year yields
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Adds comment, updates prices)
By Gertrude Chavez-Dreyfuss and Jessica DiNapoli
NEW YORK, March 19 (Reuters) - The dollar advanced against major currencies on Friday, hitting a more
than one-week high, after the Federal Reserve allowed a pandemic-driven break on capital requirements lapse,
pushing U.S. Treasury yields off their lowest levels of the day.
The greenback in recent weeks has risen in line with higher Treasury yields. Since early January, the
dollar index, a gauge of its value against six major currencies, has gained about 3.3%, with the benchmark
U.S. 10-year note climbing about 80 basis points in the same timeframe.
The Fed announced on Friday it would let expire on March 31 a temporary rule directing larger banks to
hold more capital against their assets, such as Treasuries.
The Fed had put the rule in place to encourage bank lending as American households and businesses were
hurt by lockdowns.
The dollar index was last up 0.1% on the day at 91.906 =USD . It had fallen sharply in the wake of the
Fed's announcement about its loose policy stance on Wednesday.
On the week, the dollar climbed 0.6%, posting gains in the three of the last four weeks.
"News that the U.S. Treasury SLR exemption is not being extended has given the dollar a little support,
again largely via the rise in U.S. Treasury yields," said ING in a research note.
"The near disorderly rise in U.S. Treasury yields at some points this year have certainly undermined a
market biased to buy activity currencies on dips. The SLR news certainly adds an element of caution here."
The U.S. 10-year yield US10YT=RR rose on Friday after the Fed decision on the leverage rule, but
slipped in the afternoon to 1.726%. It hit a more-than-one-year peak of 1.754% in the previous session.
The Fed pledged this week to press on with aggressive monetary stimulus, saying a near-term inflation
spike would prove temporary amid projections for the strongest U.S economic growth in nearly 40 years.
"I see the dollar being a bit firmer today but not outside of its recent ranges," said Marc Chandler,
chief market strategist at Bannockburn Global Forex in New York.
"The underlying macro force is still a divergence. No one can keep up with aggressiveness of U.S.
monetary and fiscal policy."
The euro dipped 0.1% to $1.1908 EUR=EBS , giving up early gains versus the dollar on concerns about
further coronavirus lockdowns in Europe. France imposed a new four-week lockdown from Friday in 16 regions
badly hit by the health crisis. The yen was roughly flat at 108.89 per dollar JPY=EBS after the Bank of Japan widened its target band
for the benchmark yield, a decision that was in line with market expectations. The Japanese currency rose 0.4% against the greenback for the week, its best weekly showing since
mid-February.
In the cryptocurrency market, bitcoin BTC=BTSP traded 2%higher at around $58,804, after briefly
topping $60,000 again the previous day.
========================================================
Currency bid prices at 2:58 PM (1858 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 91.9160 91.8280 +0.11% 2.150% +92.1660 +91.6550
Euro/Dollar EUR=EBS $1.1906 $1.1916 -0.07% -2.54% +$1.1937 +$1.1874
Dollar/Yen JPY=D3 108.8850 108.9100 -0.04% +5.40% +109.1200 +108.6200
Euro/Yen EURJPY= 129.64 129.76 -0.09% +2.14% +129.9800 +129.3200
Dollar/Swiss CHF=EBS 0.9291 0.9274 +0.18% +5.01% +0.9320 +0.9254
Sterling/Dollar GBP=D3 $1.3866 $1.3932 -0.47% +1.50% +$1.3958 +$1.3830
Dollar/Canadian CAD=D3 1.2495 1.2486 +0.07% -1.88% +1.2547 +1.2463
Aussie/Dollar AUD=D3 $0.7745 $0.7762 -0.20% +0.70% +$0.7772 +$0.7718
Euro/Swiss EURCHF= 1.1062 1.1049 +0.12% +2.36% +1.1078 +1.1041
Euro/Sterling EURGBP= 0.8584 0.8555 +0.34% -3.95% +0.8590 +0.8536
NZ NZD=D3 $0.7168 $0.7168 +0.03% -0.15% +$0.7187 +$0.7143
Dollar/Dollar
Dollar/Norway NOK=D3 8.5230 8.5210 -0.04% -0.81% +8.6100 +8.4825
Euro/Norway EURNOK= 10.1508 10.1300 +0.21% -3.02% +10.2240 +10.1090
Dollar/Sweden SEK= 8.5333 8.5184 +0.13% +4.11% +8.5798 +8.4882
Euro/Sweden EURSEK= 10.1628 10.1496 +0.13% +0.86% +10.1894 +10.1320
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates https://tmsnrt.rs/2RBWI5E
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>