FOREX-Dollar rebounds as commodities ease; mkt adjusts bets
(Changes byline and dateline, updates prices, adds quotes)
LONDON, March 24 (Reuters) - The dollar strengthened broadly on Monday, extending gains into a fourth session as investors unwound large bets in commodities to square up positions across a range of asset classes ahead of the end of the first quarter.
In holiday-thinned trade, investors continued to cash in on a sharp rally lately to historic highs in commodities such as oil, gold and wheat, at the same time cashing in bets against the dollar after driving it down to historic lows last week.
The Federal Reserve's aggressive action in recent weeks aimed at preventing further damage from the global credit crisis has also given the beleaguered dollar some breathing space.
The Fed and Bank of England denied a weekend media report that they were considering buying mortgage-backed securities to help ease the credit crisis, although a BoE spokesman said the Bank was considering a "number of other options".
Trading in Europe was anaemic owing to the Easter holiday, although activity should pick up when U.S. markets open.
"The dollar has traded firmer in the Asia session, boosted by a further unwind in commodity prices," wrote UBS currency analysts in a note to clients.
"The markets are still very clearly in a process of further de-leveraging with hedge funds liquidating crowded trades in commodities. We think risk/reward for tactical short euro/dollar and euro/Swiss positions continues to look attractive," they said.
At 1000 GMT, the euro was down 0.3 percent on the day at $1.5385 EUR=, slipping further from a record high of $1.5905 struck on electronic trading platform EBS last week.
The dollar rose 0.5 percent against the yen to 110.10 yen JPY=, keeping some distance from a 13-year low of 95.77 yen hit on EBS early last week.
The dollar index, a measure of the greenback's value against six major currencies, was up 0.4 percent at 73.045 .DXY.
Oil CLc1 was down 1 percent at $100.72 a barrel on Monday, gold was flat at $918.70 an ounce, having both shed around 7.5 percent last week. Wheat futures, meanwhile, rebounded 1 percent on Monday after tumbling around 17 percent last week WK8.
QUARTER END
The euro's record peak versus the dollar last week came after the collapse of U.S. investment bank Bear Stearns BSC.N. Continued...
