* Dollar slammed across the board
* DXY break of chart support targets 2008 all-time low
* Risk seen of USD short-covering before Easter holidays
* Euro/dollar above $1.46, poised to push towards $1.50
* "Burning, burning hot" Aussie eyes $1.10
By Eric Burroughs and Masayuki Kitano
TOKYO/SINGAPORE, April 21 (Reuters) - The dollar tumbled to
a three-year low against a basket of currencies on Thursday,
with market players selling the greenback to buy buoyant risky
assets in a move that threatens to drive the dollar index
towards its historic low.
The dollar has taken a hit in the past few days as investors
have flocked back to higher-yielding currencies, commodities and
equities after a brief shake-out earlier in the week.
The chart outlook for the greenback is looking dire after it
tumbled through the 74.17 trough touched in November 2009, a
move that may spark a run towards the 70.698 all-time low hit in
2008.
Investors have rushed into risky assets due to strong U.S.
corporate earnings and signs the global economy is chugging
along even as the Federal Reserve stays very cautious about when
it will start to unwind its super-loose policy.
Traders said the move was being fueled in relatively
illiquid trade and there was a risk of a dollar rebound later in
the day as market players cover short positions before long
Easter weekends in many parts of the world.
But the overall outlook was dim for the dollar as the Fed is
still buying bonds and the threat by ratings agency Standard &
Poor's to cut the United States' prized AAA rating reminded
investors of the hurdles the world's reserve currency faces.
"It's been pretty amazing, a one-way freight train," said a
senior trader at a U.S. bank in Hong Kong. "You just can't fade
it, the trend is so powerful."
A series of records have been broken this week. Gold <XAU=>
vaulted to all-time highs above $1,500 an ounce and the Aussie
powered to peaks above $1.07, while the Singapore dollar
<SGD=D4>, Swiss franc <CHF=> and South Korean shares <>
reached all-time highs.
The dollar has suffered the most against commodity-linked
currencies such as the Aussie and Canadian dollars, as well as
emerging markets currencies such as the Singapore dollar as
authorities in Asia allow more currency strength to fight
inflation.
Yet Asian authorities have regularly intervened to buy
dollars to limit the gains in their currencies, including on
Thursday.
Traders say a portion of those dollar purchases are
typically shifted into the euro, Aussie and other currencies,
creating a vicious circle that drags the dollar lower.
"Every day it's going on ... The strong local currencies
usually mean interventions and euro buying against the dollar,"
said a trader for a European bank in Singapore. Traders also
noted Asian central banks buying the Aussie and Canadian dollar.
The dollar index <.DXY> fell 0.6 percent from late New York
trade to 73.898, the lowest since August 2008 -- just before it
surged during the Lehman Brothers collapse as investors
scrambled for safe-havens.
The DXY's fortunes had already been looking grim since last
month when the index broke an upward trendline off the 2008 and
2009 lows.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Euro zone hit by Greek debt fears []
Breakingviews on Greek debt scenarios: []
GRAPHICS
Asset returns in 2011 http://r.reuters.com/zub29r
Inflation-adjusted gold http://r.reuters.com/ren88r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
EURO RESILIENT BUT LAGS
The euro pushed to a 16-month peak but has lagged the
broader move due to the ongoing worries about the euro zone
crisis, underscored this week by reports that Greece may
restructure its debt in coming months.
A solid auction of Spanish debt the previous day helped
provide some reassurance that the problems plaguing Greece,
Ireland and Portugal would not spread to the country seen as the
next most vulnerable in the euro zone.
The euro was up 0.7 percent at $1.4612 <EUR=> after jumping
to a high of $1.4618 on EBS, triggering stops on the way up
after breaching an option barrier at $1.4550 and the January
2010 high at $1.4583.
The single currency also appears to be poised for further
gains on the charts, with the path clearing for a run at the
2009 peak at $1.5145.
The Australian dollar was up 0.6 percent at $1.0756 <AUD=D4>
after pushing as high as $1.0772 on Thomson Reuters Matching --
the highest since being floated in the early 1980s. For the
week, the Aussie was up 1.8 percent, making it the best
performer among G10 currencies.
"The AUD is burning, burning hot," said one trader at
another European bank in Singapore.
The dollar dipped 0.7 percent against the yen to 81.95 yen
<JPY=>, breaking chart support with the fall below 82.00 -- the
intraday high reached on March 18 when the G7 intervened to sell
the yen.
The yen has also slid broadly with the dollar as the Bank of
Japan has loosened policy since the massive earthquake, tsunami
and nuclear crisis, making the low-yielding yen an attractive
funding currency for carry trades along with the dollar.
Trading activity may start to slow before the Easter
holidays. Trading desks in London and Hong Kong will be shut
both Friday and Monday, while Sydney markets will be closed
until next Wednesday.
(Additional reporting by Reuters FX analyst Rick Lloyd and
Masayuki Kitano in Singapore, Yoshiko Mori in Tokyo; Editing by
Joseph Radford)
