FOREX-Dollar firms as U.S. yields tick up ahead of Fed guidance

* Dollar firm after three days of gains ahead of Fed
* Fed 2023 rates projections under scrutiny
* Euro may be hampered by delay in vaccine rollouts
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

(Adds comment; updates prices)
By Julien Ponthus
LONDON, March 17 (Reuters) - The U.S. dollar firmed on
Wednesday with 10-year Treasury yields close to 13-month highs
ahead of a Federal Reserve policy meeting which could shed some
light on the timing of future rate hikes and the central bank’s
tolerance for rising yields.
With Fed policymakers expected to forecast the fastest U.S.
economic growth in decades in the wake of COVID-19 vaccinations
and $1.9 trillion in new stimulus, market participants will be
focused on clues that the central bank could start raising rates
in 2023, earlier than it had said.
In any event, expectations of a faster-than-expected
economic recovery will likely weigh.
"U.S. yields might receive further upwards thrust and pull
the dollar along with them in the absence of a clear commitment
on the part of the Fed that a further rise in yields is
undesirable", Commerzbank Antje Praefcke analyst wrote in a
morning note.
She added that because the European Central Bank had in
contrast committed to increase the pace of bond buying to keep a
lid on rising yields, the euro might suffer against the dollar
in the short term.
The euro was down 0.07% at $1.1893 after declining in
the past three sessions.
Hurt by a possible delay in the European Union's vaccination
effort, the euro seemed set to test last week's 3 1/2-month low
of $1.18355.
Europe's medicines watchdog will release results of its
investigation into incidents of bleeding, blood clots and low
platelet counts in recipients of AstraZeneca's
coronavirus vaccine on Thursday afternoon.
Europe's painful recovery from the pandemic is in sharp
contrast with other economies which seem less dependant on
monetary stimulus to pull though.
The Bank of Canada for instance is likely to reduce its bond
purchases as soon as next month, strategists say.
In morning trades in Europe, the dollar index ticked up
0.09% and stood at 91.953, having already risen for three
straight sessions on support mainly from elevated U.S. bond
yields.
Benchmark 10-year Treasury yields were also
ticking up at 1.6340%. They had reached 1.6420% on Friday for
the first time since February 2020.
Against the yen, the greenback firmed 0.15% to 109.14 yen
, hovering near nine-month highs hit this week.
The British pound was up 0.14% at $1.3914 recovering
from profit-taking after it hit a near three-year high last
month on the back of a fast vaccine rollout.
Commodity-linked currencies including the Australian dollar
, the New Zealand dollar and the Canadian dollar
eased slightly against the U.S. dollar, tracking weakness
in commodity prices.
In the cryptocurrency market, bitcoin fell 2.1%
to $55,708.79, slipping further away from a record high of
$61,781.83 hit on Saturday.

========================================================
Currency bid prices at 843 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar $1.1894 $1.1903 -0.08% -2.66% +1.1908 +1.1887
Dollar/Yen 109.1250 109.0200 +0.12% +5.67% +109.2000 +109.0950
Euro/Yen 129.80 129.75 +0.04% +2.25% +129.9300 +129.7200
Dollar/Swiss 0.9279 0.9248 +0.34% +4.89% +0.9280 +0.9248
Sterling/Dollar 1.3914 1.3895 +0.14% +1.85% +1.3929 +1.3880
Dollar/Canadian 1.2461 1.2448 +0.10% -2.14% +1.2462 +1.2434
Aussie/Dollar 0.7729 0.7746 -0.19% +0.49% +0.7747 +0.7724
NZ Dollar/Dollar 0.7182 0.7190 -0.11% +0.01% +0.7194 +0.7174


All spots
Tokyo spots
Europe spots
Volatilities
Tokyo Forex market info from BOJ


(Reporting by Hideyuki Sano in Tokyo and Sagarika Jaisinghani
in Bengaluru; Editing by Sam Holmes, Gerry Doyle and Andrew
Cawthorne)