FOREX-Dollar, yen falters as risk-taking resumes

* Dollar index down 0.2 pct at 80.79 (.DXY: )

* German ZEW sentiment index higher than expected

* Euro pressured vs dlr on concerns about Greece

(Adds quotes, data, updates prices)

By Tamawa Desai

LONDON, April 20 (BestGrowthStock) – The dollar and yen eased on
Tuesday as a sell-off in growth-linked currencies waned and
risk-taking sentiment strengthened on expectations of global
economic recovery.

The euro rose to session highs against the dollar (EUR=: )
after the German ZEW institute’s April economic sentiment index
came in above forecast. [ID:nDEP003302]

“The second quarter is shaping to be one of strong growth
after the weak first quarter,” said Uwe Angenendt, economist at
BHF.
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For a graphic of the ZEW index and German GDP, click

http://graphics.thomsonreuters.com/10/04/DE_ZEWGDP0410.gif
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By 1033 GMT, the euro hovered near the day’s high of
$1.3522, up 0.2 percent on the day (EUR=: ). Traders said gains
accelerated after stop-losses were hit above $1.3510.

The euro also got a mild boost after strong investor demand
at a 1.5 billion euro sale of Greek 13-week T-bills, which
showed a bid-to-cover ratio of 4.6. [ID:nWLB2961]

The brighter euro zone data followed UK consumer price
inflation, which came in at a higher-than-expected 3.4 percent
year on year in March, compared with forecasts of 3.2 percent,
and underpinned the pound (GBP=D4: ).

The dollar index (Read more about the global trade. ), a gauge of the greenback’s value against a
basket of currencies (.DXY: ), was down 0.2 percent at 80.79 after
pulling back from a high of 81.28 on Monday.

The yen came off Monday’s one-month highs hit against the
dollar as investor appetite for riskier assets was supported by
positive U.S. earnings, which helped Wall Street rise and eased
fears about the impact of the U.S. SEC’s fraud case brought
against Goldman Sachs (GS.N: ).

The UK’s financial watchdog said on Tuesday it would start a
formal probe into Goldman.

The dollar rose 0.4 percent from late New York trade to
92.75 yen (JPY=: ), up from a low of 91.58 yen on Monday.

The yen also fell on the crosses, falling 0.5 percent
against the euro at 125.36 yen per euro (EURJPY=R: ) and 0.8
percent against the Australian dollar (AUDJPY=R: ).

Analysts said any adverse effects on air travel and
logistics from a volcanic ash cloud that had shut down European
flights was also seen contained.

But traders remained wary of chasing up the euro on concerns
about highly-indebted Greece.

The euro earlier fell after European Central Bank Governing
Council member Axel Weber said Greece may require assistance of
up to 80 billion euros to avoid default, according to a report
in the Wall Street Journal on Tuesday. [ID:nLDE63J05P]

That amount would be far larger than the 30 billion euro aid
mechanism agreed by euro zone finance ministers earlier this
month.

WAY OUT

“No one believed that initial amount would be enough to
cover Greece’s funding needs,” said Lee Hardman, currency
economist at Bank of Tokyo-Mitsubishi UFJ. “The short-term
liquidity risk may be reduced, but that doesn’t resolve the
issue of debt sustainability. It’s difficult to see a way out
for Greece.”

Sweden’s central bank left interest rates unchanged as
expected, and repeated it would begin tightening policy in
summer or early autumn. [ID:nSAC016657]

The crown briefly dipped to around 9.6750 against the euro
from 9.6525 beforehand (EURSEK=: ) but later headed higher.
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For a graphic of Swedish rates and the crown, click

http://graphics.thomsonreuters.com/10/04/SD_RTS0410.jpg
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The Bank of Canada is expected to keep rates steady later in
the day, but market participants expect a hawkish tilt to its
assessment given the strength of its economy.

Investing

(Graphics by Scott Barber, editing by Nigel Stephenson)

FOREX-Dollar, yen falters as risk-taking resumes