FOREX-Dollar trades flat as U.S. yields rise, oil advances

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

(Adds afternoon pricing)
By Herbert Lash and Ritvik Carvalho
NEW YORK/LONDON, Aug 25 (Reuters) - The dollar was little
changed on Wednesday as oil prices slowed after a big two-day
advance, U.S. Treasury yields moved higher and investors awaited
clues on the tapering of economic support by the Federal Reserve
at this week's Jackson Hole symposium.
Risk appetite in global markets improved after the U.S. Food
and Drug Administration earlier this week fully approved the
COVID-19 vaccine made by Pfizer and BioNTech,
in a move that could accelerate U.S. inoculations.
Dr. Anthony Fauci, the top U.S. infectious disease expert,
said on Tuesday the United States could get COVID-19 under
control by early next year.
But the focus has turned to Jackson Hole and what Fed Chair
Jerome Powell may say about tapering the U.S. central bank's
stimulative bond-buying program when he speaks on Friday.
Markets expect Powell to sound dovish and echo concerns
last week by Robert Kaplan, the Dallas Fed president, who said
he might reconsider the start to tapering due to the Delta
variant of the coronavirus, said Shaun Osborne, chief FX
strategist at Scotiabank in Toronto.
"The risk is that Powell does not really say anything too
different but by virtue of not backing up Kaplan, comes across
as more hawkish," Osborne said.
The dollar picked up support as Treasury yields nudged
higher, he said. The benchmark 10-year Treasury later rose 5.7
basis points to yield 1.3474%. Algorithmic traders selling
Treasuries after the 10-year yields broke above their daily
200-day moving average may have exacerbated the gains.

The dollar index, which measures the U.S. currency
against a basket of six major trading currencies, was higher in
early trading, then eased 0.06% to 92.8550.
The euro gained 0.09% at $1.1766, while the yen
fell 0.32% at $110.025.
The greenback had rallied until the start of this week, with
the dollar index hitting a 9-1/2-month high of 93.734 on Friday,
on fears over the Delta variant's economic impact and as the Fed
signaled its tapering of monetary stimulus was likely this
year.
Vasileios Gkionakis, global head of FX strategy at Lombard
Odier Group, said there's been skittishness over growth and
sector rotations, which has boosted the dollar because of its
safe-haven status.
"In the short term, we're still going to be trading in
ranges, with upside bias," Gkionakis said.
Dollar underperformance after Jackson Hole could be a buying
opportunity ahead of the release of U.S. data next week,
including the non-farm payrolls report for August, said Valentin
Marinov, head of G10 FX research at Credit Agricole.
"Potential positive surprises from the NFP in particular
could put QE (quantitative easing) taper back among the main FX
market drivers and support the USD," Marinov said.
Sterling rose 0.22% to $1.3758 while Australia's
dollar recouped early losses to trade up 0.25% to
$0.7276.
The dollar gained 0.08% to 1.2599 against the Canadian
dollar. Earlier the dollar was stronger as commodity prices, and
especially crude oil, had moderated. But oil later surged.
Brent crude, the international benchmark, rose
$1.20, or 1.7%, to $72.25 a barrel after gaining 9% on Monday
and Tuesday from last week's close.
The Canadian currency still looks fundamentally undervalued
but the case for a significant rebound after recent volatility
has weakened, Osborne said. The narrowing of U.S.-Canadian
spreads will make it harder for the Canadian dollar to
strengthen materially for now, he said.
"Generally, we expect the U.S. dollar to grind higher in the
next few weeks and months," he said.

========================================================
Currency bid prices at 3:34PM (1934 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 92.8550 92.9130 -0.06% 3.194% +93.1350 +92.8090
Euro/Dollar $1.1766 $1.1757 +0.09% -3.69% +$1.1775 +$1.1726
Dollar/Yen 110.0250 109.6800 +0.32% +6.49% +110.1200 +109.6650
Euro/Yen 129.46 128.93 +0.41% +2.00% +129.5200 +128.7700
Dollar/Swiss 0.9139 0.9129 +0.12% +3.31% +0.9157 +0.9127
Sterling/Dollar $1.3758 $1.3729 +0.22% +0.71% +$1.3766 +$1.3699
Dollar/Canadian 1.2599 1.2589 +0.08% -1.06% +1.2643 +1.2589
Aussie/Dollar $0.7276 $0.7259 +0.25% -5.40% +$0.7280 +$0.7238
Euro/Swiss 1.0754 1.0731 +0.21% -0.49% +1.0755 +1.0724
Euro/Sterling 0.8552 0.8559 -0.08% -4.31% +0.8569 +0.8551
NZ $0.6980 $0.6954 +0.40% -2.79% +$0.6983 +$0.6930
Dollar/Dollar
Dollar/Norway 8.8030 8.8335 -0.40% +2.46% +8.8610 +8.7980
Euro/Norway 10.3601 10.3697 -0.09% -1.02% +10.4060 +10.3509
Dollar/Sweden 8.6877 8.6940 +0.09% +5.99% +8.7215 +8.6789
Euro/Sweden 10.2222 10.2135 +0.09% +1.45% +10.2365 +10.1996





(Reporting by Ritvik Carvalho; Additional reporting by Kevin
Buckland in Tokyo; Editing by Bernadette Baum, Barbara Lewis and
Chizu Nomiyama)