* Robust U.S. data helps dollar
* Investors take profits on short dollar bets
* Euro posts best month since July 2020
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E (Adds comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, April 30 (Reuters) - The dollar rose on Friday, extending gains after upbeat data on personal income, spending, and manufacturing in the U.S. Midwest, with market participants also taking profits on the currency's short dollar positions this month.
The dollar index was down 2.1% for the month of April, its largest monthly loss since December.
Next week's U.S. data, which includes non-farm payrolls for April and key U.S. manufacturing and services indexes, should reinforce expectations of a strong recovery from the pandemic by the world's largest economy.
"Another round of potentially strong data in the U.S. may add pressure to start discussing tapering," said ING in its latest research note.
"With some possible fresh weakness in Treasuries on the way, the U.S. dollar might find some respite against the low-yielders," the bank added.
After the Fed's policy meeting on Wednesday, Fed Chair Jerome Powell acknowledged the U.S. economy's growth, but said there was not enough evidence of "substantial further progress" toward recovery to warrant a change to its ultra-loose monetary settings. data showing a 4.2% rebound in U.S. consumer spending in March, amid a 21.1% surge in income as households received additional COVID-19 relief money from the government, supported the dollar. That led to a 0.4% rise in the core personal consumption expenditures (PCE) index, compared with a gain of 0.3% the previous month. remained firm on the Fed's interest rate path and QE (quantitative easing) program on Wednesday, leaving traders with the uncomfortable feeling inflation could run away - and run away quickly," Adam Corbett, currency analyst, at Cambridge Global Payments, said in a research note after the data.
Similarly, the dollar also gained after the Chicago Purchasing Management Index (PMI) showed a reading for April of 72.1, the highest in almost four decades.
In afternoon trading, the dollar index =USD ended the week up 0.5%. It was last up 0.7% at 91.263, the largest daily gain since late February.
"The current strength in the dollar is likely a pivot to the seasonal trend that we tend to see in May and June," said Mazen Issa, senior currency strategist at TD Securities in New York, after the greenback's underperformance this month. He added that April is typically one of the weaker months for the dollar.
The Canadian dollar CAD=D3 climbed to a more-than three-year high of C$1.2266 per greenback on Friday, on track for a 1.6% weekly gain that would be its biggest since early November. The U.S. dollar was last flat at C$1.2276.
In contrast to the Fed's dovishness, the Bank of Canada has already begun to taper its asset purchases. Canada's commodity-linked loonie got additional support from a surge in oil to a six-week peak, along with higher lumber prices.
The euro EUR=EBS traded 0.8% lower at $1.2025, posting its largest daily percentage fall since late February. But it was up 2.5% for the month versus the dollar, its best monthly showing since July 2020.
The dollar also rose against the yen, up 0.3% at 109.29 JPY=EBS , rising 1% for the week. But it was down 1.3% for the month, its worst monthly showing since July 2020 as well.
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Currency bid prices at 3:01PM (1901 GMT) Description
RIC
Last
U.S. Close Pct Change
YTD Pct
High Bid
Low Bid
Previous
Change
Session
Dollar index
=USD
91.2580
90.6200
+0.71%
1.419%
+91.3110
+90.5880 Euro/Dollar
EUR=EBS
$1.2024
$1.2122
-0.80%
-1.58%
+$1.2127
+$1.2018 Dollar/Yen
JPY=EBS
109.2950
108.9150
+0.37%
+5.80%
+109.3400 +108.7100 Euro/Yen
EURJPY=
131.42
131.99
-0.43%
+3.55%
+132.1900 +131.3800 Dollar/Swiss
0.9134
0.9089
+0.51%
+3.26%
+0.9136
+0.9082 Sterling/Dollar GBP=D3
$1.3810
$1.3946
-0.97%
+1.08%
+$1.3958
+$1.3804 Dollar/Canadian CAD=D3
1.2279
1.2278
+0.01%
-3.57%
+1.2322
+1.2266 Aussie/Dollar
AUD=D3
$0.7705
$0.7766
-0.77%
+0.18%
+$0.7784
+$0.7704 Euro/Swiss
EURCHF=
1.0981
1.1013
-0.29%
+1.61%
+1.1022
+1.0976 Euro/Sterling
EURGBP=
0.8704
0.8691
+0.15%
-2.61%
+0.8717
+0.8682 NZ
NZD=D3
$0.7158
$0.7243
-1.14%
-0.29%
+$0.7254
+$0.7160 Dollar/Dollar
Dollar/Norway
NOK=D3
8.3115
8.1895
+1.48%
-3.21%
+8.3220
+8.1820 Euro/Norway
EURNOK=
9.9964
9.9355
+0.61%
-4.50%
+10.0164
+9.9215 Dollar/Sweden
8.4595
8.3705
+0.26%
+3.21%
+8.4642
+8.3620 Euro/Sweden
EURSEK=
10.1724
10.1460
+0.26%
+0.95%
+10.1817
+10.1385
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates
https://tmsnrt.rs/2RBWI5E Dollar heads for fourth weekly loss
https://tmsnrt.rs/3b8GtJl
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>