* Euro briefly touches $1.24; rising U.S. yields help dollar
* Swiss franc close to 1.20 level vs euro
* Turkish lira eases after Wednesday’s jump
* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh
By Tommy Wilkes
LONDON, April 19 (Reuters) - The euro briefly flirted with $1.24 on Thursday but a rise in long-term U.S. bond yields supported the dollar and pushed the single currency further back into its recent trading range.
Given the scale of gains in the 10-year Treasury note yield , which climbed more than 5 basis points overnight for its biggest one-day surge since March 2, the dollar’s strength was limited.
The modest moves underlined investor caution and that a rally in the euro, which gained at the start of this year, has run out of steam. Investors are growing nervous that the euro zone economy’s rebound is nearing the top and the European Central Bank may move more slowly to tighten monetary policy.
Broad uncertainty stemming from U.S. President Donald Trump’s trade and economic policies, as well as geopolitical events in the Middle East and elsewhere has meanwhile weighed on the dollar.
“There is no real impulse from monetary policy. There is a little bit of fatigue with the trade war issue and the global economic cycle is losing momentum, especially in the euro zone whereas the U.S. is holding up,” said Christin Tuxen, an FX strategist at Danske Bank.
The euro fell 0.1 percent to $1.2365 after earlier hitting $1.24. The dollar index, measuring the U.S. currency against a basket of currencies, traded flat at 89.644.
Tuxen remains bullish on the euro, seeing the single currency rise towards $1.30 in 12 months but said in the short-term the euro could fall as the ECB, which meets next week, takes more time in raising rates.
With the U.S. Federal Reserve tightening, diverging interest rate views have driven the spread between U.S. and German 10-year government bond yields above 230 basis points, the highest since late December 2016.
The euro had weakened to a 14-year low the last time the yield spread was at the current width. But it has been relatively immune to the current yield spread widening. The spread has increased more than 30 basis points over the past three months, but the common currency has moved within a relatively narrow $1.2556-$1.2154 range.
“While we have been arguing that the dollar will take its cue from the U.S. economic cycle – irrespective of what the Fed does – we do believe that the outlook for global asset prices in general now rests on what U.S. monetary officials choose to do next,” ING analysts said.
The Swiss franc fell to within a whisker of the 1.20 per euro mark it last hit in January 2015 - before the Swiss National Bank removed its currency peg and the franc shot up.
Expectations the SNB will refrain from reining in its balance sheet even when the ECB acts has pushed the franc lower. The franc touched 1.9999 francs per euro earlier on Thursday before recovering to 1.1977.
Turkey’s lira, one of the worst performing currencies in recent months, fell after rallying more than 2 percent against the dollar overnight after President Tayyip Erdogan called early elections for in June, more than a year earlier than planned.
Erdogan’s early election call was seen by some market players as recognition of the need for tighter monetary policy to combat inflation.
The lira fell 0.5 percent at 4.0285 against the dollar . Wednesday’s surge moved it significantly away from a record low of 4.194 set last week.
A rally in commodity prices, including large moves in oil and iron ore, helped the Australian dollar rise even after disappointing jobs data. The Aussie dollar was up 0.1 percent at $0.7793, having recovered from a low of $0.7765. (Reporting by Tommy Wilkes Additional reporting by Shinichi Saoshiro; Editing by Hugh Lawson and Jon Boyle)