FOREX-Dollar pares losses as reflation trade sends yields higher

 (Recasts with new prices, comments)
    * Euro on the back foot
    * Aussie, kiwi make three-year peaks
    * Sterling gains as lockdown finish-line comes in to view
    * Graphic: World FX rates

    By Julien Ponthus
    LONDON, Feb 22 (Reuters) - The U.S. dollar pared losses in
early European trading after hitting multi-year lows against
sterling and the Australian and New Zealand currencies as
vaccine progress, expectations for faster economic growth and
inflation sent bond yields higher. 
    Yields on 10-year U.S. and German government
bonds hit one-year and eight-month highs respectively as traders
continued to play reflation trades. 
    The British pound was holding the $1.40 line after
reaching 1.4043, its highest since April 2018, as Prime Minister
Boris Johnson charts a path out of lockdowns on the back of
rapid vaccinations.    
    The Aussie rose as much as 0.5% to an almost
three-year high of $0.7908 before letting the dollar come back
to 0.7864. 
    The kiwi hit $0.7338, also its best since early
2018, helped by S&P's upgrade of New Zealand's sovereign credit
ratings by a notch, but also saw the greenback gradually pare
most losses.
    The yen lost 0.33% at 105.78 while the euro
 lost 0.2% at $1.2095 ahead of a German sentiment
survey and a speech at 1345 GMT by European Central Bank
President Christine Lagarde.
    Commerzbank analyst Ulrich Leuchtmann argued that much at
stake for the relationship between the euro and the dollar lies
in the growth differential between the two economies. 
    "Where EUR-USD is going to go medium-term depends on whether
the U.S. economy really will be able to achieve a stronger
post-lockdown boom than Europe", he said, adding he expects the
common currency to suffer in that regard in the first half of
    All in all, the U.S. dollar index was up 0.28% at
    In the cryptocurrency market, bitcoin eased from
the record high of $58,354.14 hit during the weekend, retreating
to $56,039. 
    Currency bid prices at 854835 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar                  $1.2097        $1.2118     -0.17%         -0.99%      +1.2135     +1.2092
 Dollar/Yen                   105.7950       105.4900    +0.27%         +2.40%      +105.8400   +105.5050
 Euro/Yen                     127.97         127.75      +0.17%         +0.83%      +128.2400   +127.7000
 Dollar/Swiss                 0.9015         0.8965      +0.56%         +1.90%      +0.9023     +0.8962
 Sterling/Dollar              1.3995         1.4001      -0.04%         +2.44%      +1.4051     +1.3980
 Dollar/Canadian              1.2648         1.2619      +0.25%         -0.65%      +1.2653     +1.2581
 Aussie/Dollar                0.7864         0.7868      -0.05%         +2.23%      +0.7908     +0.7855
 NZ                           0.7289         0.7297      -0.12%         +1.49%      +0.7337     +0.7282
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Tokyo Forex market info from BOJ

 (Reporting by Julien Ponthus; 
Editing by Sam Holmes and Andrew Cawthorne)

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