FOREX-Dollar bounces back as bearish momentum fades for now

Wed Apr 13, 2016 8:05pm EDT
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* Dollar index posts biggest one-day rally in over a month

* Aussie bulls eye labour force data at 0130 GMT

By Ian Chua

SYDNEY, April 14 (Reuters) - The dollar was broadly firmer early on Thursday, having posted its biggest one-day gain in more than a month as an improvement in global sentiment led investors to trim bearish positions.

The Federal Reserve has highlighted global uncertainty as the major bar to another hike in interest rates. So, when upbeat China trade data and a pick up in commodity prices seemed to lessen the risk of a deeper world downturn, dollar bulls figured there was now more chance of a move.

Analysts at CitiFX said recent developments might serve as "foundational encouragement" for investors to warm up to the idea of pricing in more tightening.

The dollar index rallied nearly 1 percent overnight and was last at 94.744. The greenback popped back above 109.00 yen, pulling well away from a 17-month trough of 107.63 set a few days ago.

Beating a hasty retreat, the euro skidded to $1.1273 from a six-month high of $1.1465.

Just this week, Richmond Fed President Jeffrey Lacker, San Francisco Fed President John Williams and Philadelphia Fed President Patrick Harker all suggested that several hikes were possible this year.   Continued...