* Dollar index had plumbed its lowest levels since late
* Sterling edges down after notching more than 6-month highs
* Worries about French election, N. Korea loom in background
TOKYO, April 19 The dollar index edged away from
three-week lows on Wednesday, as a resurgent sterling gave back
some of the gains it made after British Prime Minister Theresa
May called an early general election ahead of Brexit
The pound sailed to its highest in more than six months
after May said the election would "secure the strong and stable
leadership" position needed for talks with the European Union
about terms for the looming exit.
The dollar index, which tracks the greenback against a
basket of six rival currencies, edged up 0.1 percent to 99.633
, pulling away from its overnight low of 99.465, its
deepest trough since March 28.
Sterling gave up 0.2 percent on the day to $1.2823
after rising as high as $1.2908 on Tuesday, its highest since
early October, as investors scurried to cover short positions.
"May's decision to hold a vote gave sterling a lift higher,"
said Masafumi Yamamoto, chief currency strategist at Mizuho
Securities in Tokyo.
"In the background, we still have other issues such as North
Korea, which could weigh on risk sentiment, as well as the
French election," he said.
U.S. Vice President Mike Pence said on Wednesday that
Washington would work with its allies and China to put economic
and diplomatic pressure on North Korea after its failed missile
test over the weekend. He added that America would defeat any
attack with an "overwhelming response".
The dollar edged up 0.1 percent to 108.58 yen, while
the euro edged down slightly to $1.0719 after riding
sterling's coat-tails to three-week highs overnight.
"Sterling's jump was a on-off event due to May's surprise
election announcement, but the French election has been a factor
for the euro for a while, and will continue to be one," said
Kumiko Ishikawa, FX market analyst at Sony Financial Holdings in
French opinion polls show far-right leader Marine Le Pen and
centrist Emmanuel Macron qualifying next Sunday for the May 7
run-off, but the gap with conservative Francois Fillon and
far-leftist Jean-Luc Melenchon has been tightening.
Weak U.S. economic data also pushed down U.S. Treasury
yields and weighed on the dollar. U.S. homebuilding fell in
March, and manufacturing output dropped for the first time in
The yield on U.S. benchmark 10-year Treasury notes stood at
2.180 percent in Asian trading, after falling as low
as 2.165 percent on Tuesday, its lowest since mid-November.
The Australian dollar slumped 0.4 percent to $0.7528
, pressured by sterling's rise as well as a slide in
iron ore prices.
(Reporting by Tokyo markets team; Editing by Sam Holmes and