SINGAPORE, April 15 (Reuters) - The dollar steadied on
Monday, holding its biggest weekly gain since 2022, as
escalating conflict in the Middle East and the prospect of
stubbornly high U.S. interest rates gave support.
    The dollar went up 1.6% against a basket of six major
currencies last week after a small but unnerving upside surprise
in U.S. inflation cast doubt over bets on U.S. rate cuts, while
European policymakers signalled a cut within a few months.
    The dollar made a 34-year high on the yen and five-month top
on the euro on Friday and traded near those levels early in the
Asia day, buying 153.24 yen and a euro for
$1.0646. There was little initial reaction to a weekend attack
on Israel by Iran.
    The Australian and New Zealand dollars rose very slightly to
lift away from lows, with the Aussie up 0.2% to $0.6475
after briefly touching a two-month trough of $0.6455.
    The kiwi, which hit a five-month low on Friday,
nudged 0.2% higher to $0.5946. Bitcoin, which like the Aussie
and kiwi can be a barometer of market sentiment, fell last week
and in weekend trade but steadied on Monday to $65,721.
    Iran had warned of a strike on Israel and over the weekend
launched drones and missiles in retaliation for what it said was
an Israeli attack on its Damascus consulate. It caused modest
damage and Iran said it now "deemed the matter concluded."
    Two senior Israeli ministers signalled on Sunday that
retaliation was not imminent and that Israel would not act
alone, leaving the region on edge over the risk of a broader
war, while financial markets were in wait-and-see mode.
    "It is too early to judge," said Jason Wong, senior market
strategist at BNZ in Wellington.
    "It was really a symbolic attack over the weekend ... never
really designed to inflict much damage - it's now over to what
Israel's response will be."
    Sterling was 0.1% firmer to $1.2460, not far from
Friday's five-month low at $1.2426.
    U.S. two-year yields rose 15 basis points last
week and markets have dialled down U.S. interest rate cut
expectations to price in just a 50 basis-point reduction this
year, with the first cut not fully priced until September. That
is a long way from January pricing for more than 150 bps in cuts
by December.
    U.S. retail sales data is due later on Monday. Canadian and
New Zealand inflation figures are due on Tuesday, along with
Chinese growth numbers. British inflation data is out on
Wednesday and Aussie jobs data on Thursday.
    
    ========================================================
    Currency bid prices at 0005 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                                                                                    
                              $1.0645         $1.0642    +0.04%          +0.00%      +1.0652     +1.0630
                                                                                                
 Dollar/Yen                                                                                     
                              153.2950        153.2450   +0.06%          +0.00%      +153.3150   +153.1900
                                                                                                
 Euro/Yen                   163.19          163.08     +0.07%          +0.00%      +163.2400   +162.9400
                                                                                                
 Dollar/Swiss                                                                                   
                              0.9138          0.9144     -0.06%          +0.00%      +0.9141     +0.9115
                                                                                                
 Sterling/Dollar                                                                                
                              1.2456          1.2449     +0.06%          +0.00%      +1.2463     +1.2451
                                                                                                
 Dollar/Canadian                                                                                
                              1.3759          1.3774     -0.11%          +0.00%      +1.3779     +1.3757
                                                                                                
 Aussie/Dollar                                                                                  
                              0.6474          0.6463     +0.18%          +0.00%      +0.6479     +0.6455
                                                                                                
 NZ                                                                                             
 Dollar/Dollar                0.5942          0.5935     +0.16%          +0.00%      +0.5950     +0.5937
                                                                                                
                                                                                                
    
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 (Reporting by Tom Westbrook; Editing by Christopher Cushing)