* U.S. jobs growth falls short but trend seen intact
* Euro pressured by French election uncertainty
* U.S. dollar net long positions at 5-week low-IMM data
TOKYO, April 10 The dollar started the week at
three-week highs against a currency basket on Monday, after a
key U.S. Federal Reserve official reinforced the central bank's
commitment to interest rate hikes.
The dollar index, which tracks the greenback against six
major rival currencies, added 0.1 percent to 101.260,
reaching out to its highest levels since March 15.
New York Fed President William Dudley said the Fed might
avoid raising interest rates at the same time that it begins
shrinking its $4.5 trillion bond portfolio, prompting only a
"little pause" in the central bank's rate hike plans.
His comments bolstered U.S. Treasury yields and burnished
the dollar's yield allure. The benchmark 10-year yield, which
wallowed at its lowest levels since November on Friday, last
stood at 2.384 percent in Asian trading, up from its
U.S. close of 2.373 percent.
"Rising interest rates in the U.S. are supporting the
dollar, I think," said Masafumi Yamamoto, chief currency
strategist at Mizuho Securities in Tokyo.
Financial markets were also watching out for developments in
the Syrian civil war following last week's U.S. missile strikes
on an airbase in Syria, which had given the perceived safe-haven
Japanese currency a boost.
The U.S. attacks were in retaliation for what it said was a
chemical weapons attack on civilians by President Bashar
al-Assad's forces. The strikes drew sharp criticism from Russia,
and questions from U.S. allies about future policy.
"Geopolitical risk can be a potentially positive factor for
the yen, with risk aversion and flight to safety," Yamamoto
added. "As for the euro, markets are pricing in uncertainty
around the French presidential election."
The dollar tacked on 0.3 percent to 111.43 yen.
Geopolitical tensions in Asia were also in focus, after the
U.S. decision to move a Navy strike group toward the Korean
peninsula following provocative behaviour from North Korea.
White House national security adviser H.R. McMaster said on
Sunday that the move was a "prudent" step.
U.S. jobs data on Friday missed forecasts but still
suggested that overall labour market strength remained intact.
Job growth slowed sharply in March amid inclement weather, and
as layoffs continued in the retail sector, but the unemployment
rate dropped to a nearly 10-year low of 4.5 percent.
Despite expectations for more Fed interest rate hikes,
speculators further trimmed their bullish bets on the U.S.
dollar in the week ended April 4, pushing net longs to their
lowest level since late February, according to Commodity Futures
Trading Commission data released on Friday and calculations by
The euro edged down 0.1 percent to $1.0580 after
earlier touching $1.0570, its lowest level since March 9.
For weeks, polls have shown centrist Emmanuel Macron and
far-right leader Marine Le Pen on track to top the first round
of voting on April 23 and go through to a May 7 runoff. But
recent polls have shown the race tightening.
(Reporting by Tokyo markets team; Editing by Shri Navaratnam)