* Euro trades at one-month lows versus dollar
* Stocks slide boosts safe-haven demand for U.S. currency
* Investors focus on earnings, higher BoA credit reserves
(Adds comments, details, updates prices)
By Vivianne Rodrigues
NEW YORK, April 20 (Reuters) - The dollar rallied broadly
and traded at a one-month high on Monday as a sharp slide in
stocks worldwide boosted safe-haven demand for the U.S.
currency.
U.S. and European equities were down more than 2 percent,
led by a slide in bank shares and commodities. Results from
Bank of America <BAC.N> included a 57 percent increase in
reserves in its last quarter for bad loans, and the stock fell
more than 16 percent. []
Comments from a European Central Bank governing council
member also added to pressure on the euro. []
Volatility in global equity markets and expectations that
the U.S. economy will rebound from recession sooner than other
regions is boosting the appeal of the greenback, analysts said.
"There's no doubt among investors that the U.S. will be the
first to get out of this recession," said Matt Esteve, a
currency trader at Tempus Consulting in Washington.
"As stocks around the globe move lower, we are seeing a
reemergence of risk aversion, and the dollar gets a boost."
The euro earlier traded at one-month lows at $1.2888
<EUR=>, according to Reuters data. The European currency later
rebounded and in midday trading, down 0.9 percent at $1.2924.
Esteve at Tempus said the European currency could trade as
low as $1.27 in the near term.
The dollar index, which measures the greenback against a
basket of major currencies, also traded at one-month highs, up
0.9 percent on the day at 86.66 <.DXY>.
Traders will keep an eye out for a raft of other major U.S.
company earnings reports this week, including financial
institutions such as The Bank of New York Mellon and Wells
Fargo Bank.
Bank of America reported a profit of 17 cents per share,
excluding items. Analysts surveyed by Reuters Estimates had
forecast earnings of 4 cents a share. But the results included
a quarter-over-quarter increase to $13.38 billion in reserves
for troubled loans.
Better-than-expected earnings from the likes of JP Morgan
<JPM.N> and Citigroup <C.N> last week helped assuage concerns
over the U.S. banking sector's health and raised views the U.S.
economy may escape recession faster than others.
"The greenback appears to be capitalizing on those better
U.S. earnings announcements," said Daragh Maher, deputy head of
global foreign exchange research at Calyon, in London.
"For now, it seems that the dollar can both have its cake
and eat it."
ECB WEIGHS ON EURO
The euro came under selling pressure as investors
anticipated the European Central Bank will cut rates next month
and on uncertainty over what kind of additional unconventional
policy measures it might announce.
ECB President Jean-Claude Trichet signaled on Sunday that
the bank was likely to cut interest rates by 25 basis points
from their current 1.25 percent on May 7, though he gave no
details of plans for further steps to stimulate the economy
[].
Still, ECB Governing Council member Ewald Nowotny was
quoted as saying on Monday the central bank should start
looking at what else it can do as it nears the lower boundary
in its interest rate policy.
He repeated that he would not like to see the ECB's main
refinancing rate cut to below 1 percent from the current 1.25
percent.
Meanwhile, the Australian dollar tumbled 2.5 percent
against its U.S. counterpart, trading at $0.7030 <AUD=> and
fell to a near three-week low against the yen of 69.54 yen
<AUDJPY=R>. Sterling also fell 1.7 percent to a low of $1.4534
<GBP=>, its weakest in nearly 3 weeks.
(Reporting by Vivianne Rodrigues; Editing by Padraic Cassidy)
