* Dollar index dips below 100, first time since early Feb
* Euro rises after French presidential debate
* Sterling surges after higher inflation print
(Updates prices, recasts, adds analysts' comments)
By Saqib Iqbal Ahmed
NEW YORK, March 21 The dollar dipped to a
three-week low against the Japanese yen on Tuesday as concerns
about how quickly the Trump administration can implement
pro-growth policies pushed stocks lower and kindled safe-haven
demand for the Japanese currency.
The greenback has been under pressure after comments from
the U.S. Federal Reserve last week disappointed dollar bulls. On
Tuesday, the dollar index, which measures the greenback against
a basket of six major currencies, dipped below the 100 level for
the first time since Feb. 7.
The dollar was down 0.68 percent at 111.79 yen.
"The current and ongoing breakdown in the U.S. dollar is
representative, driving some short-term and nascent deleveraging
of legacy 'reflation' trades, with DXY through the psychological
100 level," said Charlie McElligott, managing director and head
of U.S. cross-asset strategy at RBC Capital Markets.
The S&P 500 was down 1 percent and on pace for its
largest daily percent loss in more then five months and U.S.
Treasury yields fell to three-week lows.
"There is certainly some interplay between all these factors
that is supporting the yen," said Erik Nelson, a currency
analyst at Wells Fargo in New York.
The upcoming French elections helped the euro and weighed on
the dollar after centrist Emmanuel Macron's performance in a
television debate boosted a view he would win the presidential
race over the far-right's Marine Le Pen.
Bullish bets on the dollar spurred by Donald Trump's U.S.
presidential win and his pledge on tax cuts, deregulation and
infrastructure spending last November have been fully unwound,
Bank of America Merrill Lynch currency strategist Myria Kyriacou
said in a note.
The euro rose to its highest since Feb 2, and was last up
0.7 percent to $1.0812.
The prospect of anti-European Union, far-right candidate Le
Pen delivering a surprise election win has rattled French bond
markets this year and is a key source of political uncertainty
for the euro.
"Any news between now and the French election next month
that suggests fading risk of a Le Pen victory would probably be
supportive of the euro," said Omer Esiner, chief market analyst,
at Commonwealth Foreign Exchange in Washington.
Sterling jumped almost 1 percent to its highest level in
three weeks on Tuesday, after data showed British inflation in
February above the Bank of England's 2 percent target for the
first time since the end of 2013. This was seen as boosting
chances for a rate hike from the BoE.
(Reporting by Saqib Iqbal Ahmed; Editing by David Gregorio)