* U.S. earnings outperform, stoke risk appetite
* Euro remains under pressure on concerns about Greece
* Aussie, Canadian dollars soar on oil, rate outlook
(Adds quote, updates prices, changes byline)
By Wanfeng Zhou
NEW YORK, April 20 (Reuters) - The U.S. dollar dropped
against high-yielding currencies such as the Australian and
Canadian dollars on Tuesday, while the yen fell after strong
U.S. bank earnings stoked risk appetite.
Growing expectations of interest rate hikes, and rising oil
prices after some European flights resumed following five days
of disruption by Iceland's volcanic ash, further lifted the
commodity-linked Australian and Canadian currencies.
Goldman Sachs <GS.N>, charged with fraud by the U.S.
Securities and Exchange Commission last Friday, reported
first-quarter earnings nearly doubled []. That
boosted optimism about the global economy and knocked the yen
off three-week highs versus the dollar hit on Monday.
"It seems like we're seeing a bit of a risk-on approach
again. So the commodity currencies like the Aussie and Canadian
dollars in particular...are doing quite well," said Gareth
Sylvester, senior currency strategist at HiFX in San
Francisco.
In afternoon trading, the dollar rose 0.8 percent to 93.21
yen <JPY=>, after hitting a three-week low of 91.58 on Monday .
The euro gained 0.5 percent to 125.27 yen <EURJPY=R>.
The yen also fell on the crosses, with Aussie/yen
<AUDJPY=R> rallying 1.4 percent to 86.75 and sterling/yen
<GBPJPY=R> rising 1 percent to 143.13.
The Australian dollar rose 0.7 percent against the
greenback to US$0.9306 <AUD=>.
A coming boom in export earnings meant it could not delay a
hike in interest rates, the minutes of the Reserve Bank of
Australia's April meeting showed. []
The hawkish tone to the minutes led some investors and
analysts to bet it may raise rates yet again by another 25
basis points as early as May.
The Canadian dollar soared, with the greenback last trading
1.6 percent at C$0.9986 <CAD=>, after the Bank of Canada
signaled it may raise interest rates as soon as June, making it
the first G7 central bank willing to unwind emergency stimulus
measures as the economy roars back after the recession.
[]
In terms of technicals, traders said the currency pair
formed a double bottom at around C$0.9950, a break of which
would see an extension of a decline towards C$0.9830.
Financial markets have fully priced in a rate hike at the
June meeting and have also factored in a 50 basis-point
increase in July.
"It is clear that the bank has determined that the
conditional commitment was not as sacred as the market had once
imagined, and is instead paying tribute to the undeniable
economic reality in Canada of robust economic growth and
surprisingly high inflation," said Eric Lascelles, chief Canada
macro strategist, at TD Securities in Toronto.
The euro last traded down 0.4 percent at $1.3436 <EUR=>,
after rising to session highs on stronger-than-expected German
ZEW economic sentiment data. []
Concerns about debt troubles in Greece and other peripheral
euro zone economies like Portugal continue to dog the euro,
analysts said.
European Central Bank Governing Council member Axel Weber
said Greece may require assistance of up to 80 billion euros to
avoid default, according to a report in the Wall Street Journal
on Tuesday. []
That would be far larger than the 30 billion euro aid
mechanism agreed by euro zone officials earlier this month.
Weber, however, denied he had said Greece might need as
much as 80 billion euros, saying the numbers had been based on
false interpretation of what he had said. []
(Additional reporting by Gertrude Chavez-Dreyfuss; Editing by
Chizu Nomiyama)
