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FOREX-Dollar rises after U.S. data, but posts largest monthly fall since December

    * Robust U.S. data helps dollar
    * Investors take profits on short dollar bets
    * Euro posts best month since July 2020
    * Graphic: World FX rates tmsnrt.rs/2RBWI5E

 (Adds comment, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, April 30 (Reuters) - The dollar rose on Friday, extending gains after upbeat data on personal
income, spending, and manufacturing in the U.S. Midwest, with market participants also taking profits on the
currency's short dollar positions this month.
    The dollar index was down 2.1% for the month of April, its largest monthly loss since December. 
    Next week's U.S. data, which includes non-farm payrolls for April and key U.S. manufacturing and
services indexes, should reinforce expectations of a strong recovery from the pandemic by the world's
largest economy.
    "Another round of potentially strong data in the U.S. may add pressure to start discussing tapering,"
said ING in its latest research note. 
    "With some possible fresh weakness in Treasuries on the way, the U.S. dollar might find some respite
against the low-yielders," the bank added. 
    After the Fed's policy meeting on Wednesday, Fed Chair Jerome Powell acknowledged the U.S. economy's
growth, but said there was not enough evidence of "substantial further progress" toward recovery to warrant
a change to its ultra-loose monetary settings.
    Friday's data showing a 4.2% rebound in U.S. consumer spending in March, amid a 21.1% surge in income as
households received additional COVID-19 relief money from the government, supported the dollar. That led to
a 0.4% rise in the core personal consumption expenditures (PCE) index, compared with a gain of 0.3% the
previous month.
    "Powell remained firm on the Fed's interest rate path and QE (quantitative easing) program on Wednesday,
leaving traders with the uncomfortable feeling inflation could run away - and run away quickly," Adam
Corbett, currency analyst, at Cambridge Global Payments, said in a research note after the data.
    Similarly, the dollar also gained after the Chicago Purchasing Management Index (PMI) showed a reading
for April of 72.1, the highest in almost four decades.
    In afternoon trading, the dollar index ended the week up 0.5%. It was last up 0.7% at 91.263, the
largest daily gain since late February.
    "The current strength in the dollar is likely a pivot to the seasonal trend that we tend to see in May
and June," said Mazen Issa, senior currency strategist at TD Securities in New York, after the greenback's
underperformance this month. He added that April is typically one of the weaker months for the dollar.
    The Canadian dollar climbed to a more-than three-year high of C$1.2266 per greenback on Friday,
on track for a 1.6% weekly gain that would be its biggest since early November. The U.S. dollar was last
flat at C$1.2276.
    In contrast to the Fed's dovishness, the Bank of Canada has already begun to taper its asset purchases.
Canada's commodity-linked loonie got additional support from a surge in oil to a six-week peak, along with
higher lumber prices.
    The euro traded 0.8% lower at $1.2025, posting its largest daily percentage fall since late
February. But it was up 2.5% for the month versus the dollar, its best monthly showing since July 2020.
    The dollar also rose against the yen, up 0.3% at 109.29, rising 1% for the week. But it was
down 1.3% for the month, its worst monthly showing since July 2020 as well.
    
    ========================================================
    Currency bid prices at 3:01PM (1901 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
                                              Session                                             
 Dollar index                 91.2580        90.6200     +0.71%         1.419%        +91.3110    +90.5880
 Euro/Dollar                  $1.2024        $1.2122     -0.80%         -1.58%        +$1.2127    +$1.2018
 Dollar/Yen                   109.2950       108.9150    +0.37%         +5.80%        +109.3400   +108.7100
 Euro/Yen                     131.42         131.99      -0.43%         +3.55%        +132.1900   +131.3800
 Dollar/Swiss                 0.9134         0.9089      +0.51%         +3.26%        +0.9136     +0.9082
 Sterling/Dollar              $1.3810        $1.3946     -0.97%         +1.08%        +$1.3958    +$1.3804
 Dollar/Canadian              1.2279         1.2278      +0.01%         -3.57%        +1.2322     +1.2266
 Aussie/Dollar                $0.7705        $0.7766     -0.77%         +0.18%        +$0.7784    +$0.7704
 Euro/Swiss                   1.0981         1.1013      -0.29%         +1.61%        +1.1022     +1.0976
 Euro/Sterling                0.8704         0.8691      +0.15%         -2.61%        +0.8717     +0.8682
 NZ                           $0.7158        $0.7243     -1.14%         -0.29%        +$0.7254    +$0.7160
 Dollar/Dollar                                                                                    
 Dollar/Norway                8.3115         8.1895      +1.48%         -3.21%        +8.3220     +8.1820
 Euro/Norway                  9.9964         9.9355      +0.61%         -4.50%        +10.0164    +9.9215
 Dollar/Sweden                8.4595         8.3705      +0.26%         +3.21%        +8.4642     +8.3620
 Euro/Sweden                  10.1724        10.1460     +0.26%         +0.95%        +10.1817    +10.1385
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Ritvik Carvalho, Editing by Hugh Lawson,
Mark Heinrich and Chizu Nomiyama)
  
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