(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 https://tmsnrt.rs/2RBWI5E
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. US10YT=RR and German government bonds hit one-year and eight-month highs respectively as traders continued to play reflation trades.
The British pound GBP=D3 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. Aussie AUD=D3 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 NZD=D3 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. yen JPY=EBS lost 0.33% at 105.78 while the euro EUR=EBS 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 (DE:CBKG) 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 2021.
All in all, the U.S. dollar index =USD was up 0.28% at 90.543.
In the cryptocurrency market, bitcoin BTC=BTSP 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
Session
Euro/Dollar
EUR=EBS
$1.2097
$1.2118
-0.17%
-0.99%
+1.2135
+1.2092 Dollar/Yen
JPY=D3
105.7950
105.4900
+0.27%
+2.40%
+105.8400 +105.5050 Euro/Yen
EURJPY=
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 GBP=D3
1.3995
1.4001
-0.04%
+2.44%
+1.4051
+1.3980 Dollar/Canadian CAD=D3
1.2648
1.2619
+0.25%
-0.65%
+1.2653
+1.2581 Aussie/Dollar
AUD=D3
0.7864
0.7868
-0.05%
+2.23%
+0.7908
+0.7855 NZ
NZD=D3
0.7289
0.7297
-0.12%
+1.49%
+0.7337
+0.7282 Dollar/Dollar
All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates
https://tmsnrt.rs/2RBWI5E
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>