* Dollar gains broadly after Fed keeps door open to June
* Commodities currencies suffer despite 'risk-on' mood
* Traders point to nerves over China, commodity price falls
* Euro supported by solid Macron debate performance
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Patrick Graham
LONDON, May 4 The dollar surged against a number
of major currencies on Thursday after the U.S. Federal Reserve
played down any threats to this year's planned rises in interest
rates, solidifying expectations of another move in June.
The euro drew some support from centre-left candidate
Emmanuel Macron's performance in a TV debate ahead of Sunday's
French presidential election run-off, cooling gains for the
dollar to less than half a cent at $1.0876.
But the rise in 10-year U.S. government bond yields back
above 2.32 percent helped the dollar to a six-week high of close
to 113 yen and 4-month highs against the Aussie dollar.
The weakness of the Aussie - typically a pro-growth play -
at a time when the mood on stock markets is upbeat, stems from
sharp falls in the price of iron ore and other commodities that
suggest a rise in concern about the Chinese economy.
"Something is not right in the commodities space and it has
not been right for two weeks," said Richard Benson, co-head of
portfolio investment with currency fund Millennium Global in
"The dollar is strong after the Fed but the euro cannot go
down at the moment. With commodity prices falling, that means
the strength plays out in the commodity FX space."
After the greenback rose across the board after the Fed's
decision on Wednesday, the dollar index was up another 0.2
percent on the day on Thursday, hitting a two-week high of
It was marginally higher at 112.80 yen but more
than a third of a percent stronger at $0.7394 per Aussie dollar
and 0.2 percent higher against the New Zealand dollar.
Traders pointed to comments by JP Morgan chief Jamie Dimon
at a conference in Los Angeles. He was reported as reassuring
investors that the bank would have a bad day but would still
make money if China kicked out foreign investors.
"Recent pressure on world commodity prices culminated in
some precipitous moves overnight ... and from a technical
perspective at least, the signs are ominous," said Neil Mellor,
senior currency strategist with Bank of New York Mellon in
Such nerves over China come at a time when growth in Europe
seems to be solidifying and the Fed has finally begun to deliver
on long-disappointed market expectations of a cycle of interest
Keeping rates unchanged on Wednesday the Fed played down
recent signs of a cooling of U.S. activity and said consumer
spending continued to be solid, business investment had firmed,
and inflation has been "running close" to its target.
That kept the door "wide open" to a June rate hike, said
Mitul Kotecha, head of Asia macro strategy for Barclays in
"The risk was that they could have perhaps sounded a little
bit more dovish on the back of the recent data and that
certainly wasn't the case," he said.
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Masayuki Kitano in Singapore; Editing
by Toby Chopra)