* Cautious mood in Asia as Singapore, Taiwan see outbreaks
* Risk currencies slip, but dollar still faces broad
pressure
* Fed minutes in focus
* Graphic: World FX rates tmsnrt.rs/2RBWI5E
By Tom Westbrook and Stanley White
SINGAPORE/TOKYO, May 17 (Reuters) - The U.S. dollar was
supported on Monday amid renewed worries about coronavirus
restrictions in Asia, but investors are heavily positioned for
it to fall while the U.S. Federal Reserve keeps rates low.
Bitcoin skidded to a three-month low after Tesla Inc
boss Elon Musk suggested at the weekend that the car
maker is considering selling or may have already sold some of
its holdings in the cryptocurrency.
Easing commodity prices and fresh virus outbreaks in
Singapore and Taiwan - where COVID-19 had been contained -
helped modest dollar gains of 0.3% against the Australian dollar
and 0.4% versus the New Zealand dollar.
The greenback was little changed against the euro
and the yen, but it remained close to testing major
support levels, which if broken could see a return to a
downtrend that pressed it lower through April.
A dollar bounce that followed higher-than-expected inflation
data last week has also faded as traders figure the U.S. Federal
Reserve will keep rates low.
The dollar last traded at $1.2130 per euro and has support
around $1.2179. The dollar index is, likewise, at 90.397,
just above key support at 89.677 and 89.206. It bought 109.37
yen and traded at $0.7756 per Aussie and $0.7219 per kiwi
.
Fed minutes, from an April meeting that predated the data
surprise on inflation last week, are due on Wednesday and are
the next market focus for clues on the central bank's thinking.
"We expect the minutes ... to reiterate that policymakers
consider the pick up in inflation to be transitory," said Kim
Mundy, a currency strategist at the Commonwealth Bank of
Australia in Sydney.
"The upshot is that we do not expect the (Fed) to consider
tapering its asset purchases soon," she said. "The dollar is
expected to resume its downtrend this week after last week's
CPI-inspired boost."
Cryptocurrencies traded under pressure after another weekend
bouncing around following a tweet from Tesla's Musk suggesting
the company is possibly selling its bitcoin holdings.
Bitcoin last traded down 7.13% at $43,133. It
earlier fell to $42,185, the lowest since Feb. 8. Ether
fell to a two-week low of $3,123.
Speculators increased their bets against the dollar last
week, mostly by adding to bets on the euro and to a lesser
extent sterling as Britain and Europe head toward recovery.
Sterling was perched near a two-and-a-half-month
high on Monday, at $1.4086, as Britain reopens its economy after
a four-month COVID lockdown.
Things are travelling in the opposite direction in Asia
where some early leaders in taming the pandemic are now dealing
with new outbreaks.
Singapore and Taiwan have both tightened curbs as cases
rise, which weighed on the Singapore dollar, while the
Taiwan dollar fell to a three-week low on Monday.
The onshore yuan was little changed at 6.4380 per
dollar after a mixed round of economic data showed China's
industrial output had slowed and retail sales missed forecasts
last month.
=======================================================
Currency bid prices at 0509 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar $1.2130 $1.2147 -0.13% -0.72% +1.2151 +1.2129
Dollar/Yen 109.3750 109.3350 +0.02% +5.88% +109.4950 +109.3000
Euro/Yen <EURJPY=EB 132.67 132.78 -0.08% +4.53% +132.9400 +132.6300
S>
Dollar/Swiss 0.9024 0.9012 +0.14% +2.01% +0.9028 +0.9015
Sterling/Dollar 1.4086 1.4098 -0.07% +3.11% +1.4104 +1.4081
Dollar/Canadian 1.2119 1.2104 +0.13% -4.83% +1.2136 +1.2106
Aussie/Dollar 0.7756 0.7781 -0.33% +0.81% +0.7787 +0.7748
NZ 0.7219 0.7250 -0.44% +0.52% +0.7249 +0.7216
Dollar/Dollar All spots
Tokyo spots
Europe spots
Volatilities
Tokyo Forex market info from BOJ
(Reporting by Tom Westbrook and Stanley White; Editing by Gerry
Doyle and Muralikumar Anantharaman)
