* Dollar near six-week low on euro, two-week trough on yen
* G20 drops pledge to avoid trade protectionism
* Nine Fed policy makers to speak this week including Yellen
* Polls favour Macron win ahead of French presidential
By Wayne Cole
SYDNEY, March 20 The dollar slowly ceded ground
in Asia on Monday with greenback bulls still nursing grudges
after the Federal Reserve's rate guidance last week proved to be
less "hawkish" than many had wagered on.
There was limited initial reaction to the Group of 20
meeting over the weekend, which retained the familiar form of
words on currency intervention but dropped a pledge to avoid
"The G20 Meeting in Baden-Baden was notable for the impasse
over free trade between most countries, which want to expand it,
and the U.S. which wants to weaken it," wrote analysts at CBA in
"This is not a surprise for market participants judging from
the Trump administration rhetoric."
A holiday in Japan made for thin trading, leaving the dollar
a fraction softer near two-week lows at 112.54 yen. That
was a long way from the March top of 115.51 and biased risks to
a re-test of the February lows around 111.59/69.
Against a basket of currencies, the dollar was 0.16 percent
softer at 100.140, having matched a five-week trough set
last week in the wake of the Fed's rate hike.
The retreat left a double top on the charts at 102.25/26
that looks bearish for the near-term.
The situation was much the same against the euro, which was
holding firm at $1.0764, having reached a six-week peak
of $1.0782 on Friday. It now faces stiff chart resistance at the
January top of $1.0828.
Politics loomed large again with the first televised French
presidential debate due later on Monday.
Opinion polls out over the weekend showed centrist Emmanuel
Macron and far-right leader Marine Le Pen running neck and neck
for the first round of voting in France's presidential election,
due April 23. Yet they also showed Macron beating her
comfortably in the second-round run-off on May 7.
Dealers were also braced for a packed week of Fed messaging
with no less than nine different policymakers set to speak,
including Chair Janet Yellen on Thursday.
Yellen's cautious guidance last week has investors pricing
in almost no chance of another rate rise at the next policy
meeting in May, rising to around 50-50 for June.
"There will likely be a two month hiatus before the next
overt signalling on a Fed rate hike, enough of a time lag not to
immediately undermine the favourable risk and carry
environment," said Alan Ruskin, head of forex at Deutsche.
The appetite for risk was evident in emerging market
currencies with the dollar slipping to 22-month lows against the
Taiwan dollar and near a five-month trough on the South
Ruskin also noted there was growing talk the European
Central Bank might raise its deposit rates, currently in
negative territory, before officially ending quantitative
The risk was enough to lift short-term German yields
last week and narrow the dollar's rate advantage over
the euro by around 15 basis points.
This trend could help the euro up to around $1.1000 over the
next few months, said Ruskin, though it would ultimately not
prevent a stronger U.S. dollar later in the year.
(Editing by Sam Holmes and Randy Fabi)