* 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 continue raising interest rates.
The dollar index, which tracks the greenback against six
major rival currencies, added 0.1 percent to 101.230
after rising as high as 101.340, reaching 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 which added to
the dollar's appeal. The benchmark 10-year yield, which wallowed
at its lowest levels since November on Friday, last stood at
2.385 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.
Foreign exchange markets largely shrugged off comments from
St. Louis Fed President James Bullard, regarded as a dove, to
reporters in Australia on Monday.
Bullard said the central bank could begin winding down its
massive balance sheet sometime later this year in a shift that
would make it less necessary to raise the official funds rate.
Financial markets were also watching out for developments in
the Syrian civil war following last week's U.S. missile strike
on an airbase in Syria, which had given the perceived safe-haven
Japanese currency a boost.
The U.S. attack was in retaliation for what it said was a
chemical weapons attack on civilians by President Bashar
al-Assad's forces. The strike 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 added 0.3 percent to 111.40 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 a provocative missile test by 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.
Jobs growth slowed sharply in March because of bad weather and
as layoffs continued in the retail sector, but the unemployment
rate dropped to a near 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
"This is not the kind of market in which the dollar is
gradually bought," said Kumiko Ishikawa, FX market analyst at
Sony Financial Holdings.
"There are still geopolitical concerns, such as the Syrian
situation, in the background, and there are no fresh incentives
or reasons to buy the dollar," she said.
The euro edged down 0.1 percent to $1.0584 after
earlier touching $1.0570, its lowest level since March 9.
Polls have for weeks 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.
The Australian dollar slipped 0.2 percent to $0.7482
after earlier plumbing $0.7474, a level last seen in
(Reporting by Tokyo markets team; Editing by Shri Navaratnam
and Eric Meijer)