* Euro rebounds after ECB meeting had sent it lower
* Biden tax plan hammers cryptocurrencies
* Dollar nurses losses, all eyes on Fed meeting next week
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Adds new analyst quote, latest prices)
By Tommy Wilkes
LONDON, April 23 (Reuters) - The euro rose on Friday, edging
back towards a seven-week high, having nursed losses after
European Central Bank President Christine Lagarde squashed
speculation that policymakers will start to consider a tapering
of bond purchases.
Flash purchasing managers' index numbers for April came in
better than expected in the euro zone and supported the view
that the region's economic recovery is accelerating, although
the already-stronger euro was little moved by that data. U.S.
numbers are due at 1345 GMT.
The euro gained 0.3% to $1.2055 while the dollar
index, measured against a basket of currencies, was down 0.2%
.
The dollar was stuck in a narrow trading range near
multi-week lows on Friday, as markets look to the next moves by
major central banks ahead of a U.S. Federal Reserve meeting next
week.
"The ECB sounded much more prudent than the BoC (Bank of
Canada), as ECB President Christine Lagarde stressed that risks
are still tilted to the downside and that uncertainty remains in
place," UniCredit analysts said.
That probably offered investors the opportunity to take
profit on EUR-USD after a recent rally, they said.
While rising coronavirus vaccination rates and an improving
economic outlook are reasons to be optimistic, investors are
scaling back expectations for a withdrawal of monetary easing
after Lagarde said talk of phasing out emergency bond purchases
was premature, analysts said.
Fed Chairman Jerome Powell is expected to repeat her message
next week after the central bank's two-day meeting beginning
April 27. That would put downward pressure on Treasury yields
and cap the dollar's gains against most currencies.
Analysts also said that while U.S. President Joe Biden's
stimulus packages have boosted the outlook for growth and the
dollar recently, the longer-term picture was less clear.
"Real yields in the U.S. remain deeply negative on a 10-year
basis and reflect some of this uncertainty that will continue to
limit the upside for the U.S. dollar," said Derek Halpenny, an
analyst at MUFG.
The Australian and New Zealand dollars
firmed on Friday, but traders said risks are pointed to the
downside due to the recent weakening in commodity prices.
The pound rose 0.3% to $1.3882.
Cryptocurrency ether and bigger rival bitcoin
both tumbled amid speculation that a plan by Biden to
raise capital gains taxes will curb investment in digital
assets.
(Editing by John Stonestreet and Steve Orlofsky)