FOREX-Dollar gains broadly as Citi earnings fuel optimism

(Updates prices, adds quotes, ECB comment, byline)

By Gertrude Chavez-Dreyfuss

NEW YORK, April 18 (Reuters) - The dollar rose to a seven-week peak against the yen and moved further away from a record low versus the euro on Friday after Citigroup earnings sparked hope the credit crisis may be nearing an end.

Problems in the U.S. financial sector have been triggered by weakness in the housing market and some analysts see further falls to come, but Citigroup's earnings temporarily eased those fears and increased risk appetite, making the dollar more attractive.

Citigroup Inc (C.N: Quote, Profile, Research), the largest U.S. bank, posted a quarterly loss of $5.1 billion, adding to losses in the previous quarter, and pre-tax write-downs of $6.0 billion [ID:nWNAS8367]. But shares in the company rose as investors were appeased by efforts being made to get past credit problems and drive down costs.

"There's a prevailing sentiment that we're getting past the worst and it's a sentiment that is growing and driving some improvement in the dollar," said Nick Bennenbroek, head of FX strategy at Wells Fargo in New York.

In midday trading, the dollar rose nearly 2 percent against the yen to 104.47 yen <JPY=>, earlier reaching its strongest level since late February at 104.64 yen. Against the low-yielding Swiss franc, the dollar rose to a roughly five-week high at 1.0283 francs <CHF=> and last traded at 1.0242, up 1.7 percent from late on Thursday.

The dollar index was trading at 72.256 .DXY, up 0.9 percent.

The euro fell as much as 2 cents against the dollar from its daily peak. It last traded down more than 0.9 percent on the day at $1.5747 in midday New York trading, well away from a record peak of $1.5983 hit earlier in the week, according to Reuters data.