* Fed's Beige Book suggests U.S. expansion continues through April
* U.S./German 2-year yield spread hits widest in three decades
* Disappointing British CPI data weigh down sterling
* Canadian dollar weakens as Bank of Canada leaves rates unchanged (Updates market action, adds quote)
By Richard Leong
NEW YORK, April 18 (Reuters) - The U.S. dollar rose modestly against a basket of currencies on Wednesday, buttressed by higher U.S. bond yields and the view the Federal Reserve would raise interest rates further on signs of ongoing economic growth.
The dollar also has found support from reduced fears about a U.S. trade war with China and that Western air strikes on Syria would intensify.
The Federal Reserve's latest Beige Book, released on Wednesday, showed the U.S. economy was growing at a modest to moderate pace in March through early April. the greenback remains on a bearish path on expectations that the U.S. trade and federal deficits would balloon in the coming quarters, many analysts said.
"We have been in a remarkable stable range since February," said Paresh Upadhyaya, director of currency strategy at Amundi Pioneer Investments in Boston. "There are opposing factors that have kept the dollar in this narrow range."
The dollar index .DXY , which tracks the greenback against a basket of six currencies, gained 0.12 percent, to 89.626. It has moved between 88.253 and 90.932 since mid-February.
U.S. two-year Treasury yield US2YT=RR hit 2.431 percent on Wednesday, which was its highest since September 2008, Reuters data showed.
The yield spread on U.S. two-year Treasuries and German two-year Bunds US2DE2=TWEB grew to 300 basis points, the widest in nearly three decades, increasing the appeal of holding dollars versus the euro. euro EUR= was up 0.03 percent, at $1.2374, while the greenback JPY= was 0.27 percent higher at 107.28 yen.
Among other G10 currencies, the pound was down 0.6 percent at $1.4201 GBP=D3 after it was nudged away from a post-Brexit referendum 22-month high of $1.4377 on Tuesday by weaker-than-expected British wage data.
Annual British consumer price inflation slowed to 2.5 percent in March from 2.7 percent posted in February. were still pricing in a more than even chance the Bank of England will hike interest rates in May, expectations of which have helped sterling advance aggressively this month. GBP=D3
The Canadian dollar weakened 0.6 percent to C$1.2630 per dollar CAD=D4 after the Bank of Canada, as expected, left key rates unchanged, but the tone in its policy statement was not as hawkish as some traders had expected. ========================================================
Currency bid prices at 3:17PM (1917 GMT) Description
RIC
Last
U.S. Close Pct Change
YTD Pct
High Bid
Low Bid
Previous
Change
Session
Euro/Dollar
EUR=
$1.2374
$1.2370
+0.03%
+3.15%
+1.2397
+1.2343 Dollar/Yen
JPY=
107.2700
106.9900
+0.26%
-4.79%
+107.3800 +107.0100 Euro/Yen
EURJPY=
132.75
132.35
+0.30%
-1.80%
+132.9000 +132.3500 Dollar/Swiss
CHF=
0.9683
0.9660
+0.24%
-0.62%
+0.9698
+0.9651 Sterling/Dollar GBP=
1.4204
1.4286
-0.57%
+5.12%
+1.4314
+1.4174 Dollar/Canadian CAD=
1.2630
1.2545
+0.68%
+0.42%
+1.2659
+1.2548 Australian/Doll AUD=
0.7781
0.7764
+0.22%
-0.26%
+0.7797
+0.7745 ar
Euro/Swiss
EURCHF=
1.1983
1.1951
+0.27%
+2.52%
+1.1992
+1.1951 Euro/Sterling
EURGBP=
0.8712
0.8656
+0.65%
-1.93%
+0.8722
+0.8644 NZ Dollar/Dolar NZD=
0.7319
0.7341
-0.30%
+3.29%
+0.7344
+0.7305 Dollar/Norway
7.7631
7.7599
+0.04%
-5.41%
+7.7837
+7.7417 Euro/Norway
EURNOK=
9.6082
9.6008
+0.08%
-2.44%
+9.6195
+9.5911 Dollar/Sweden
SEK=
8.3978
8.4021
+0.01%
+2.39%
+8.4267
+8.3746 Euro/Sweden
EURSEK=
10.3944
10.3936
+0.01%
+5.64%
+10.4090
+10.3787
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ US/German 2-year yield gap widest since 1989
https://reut.rs/2JX0Iue World FX rates in 2018
http://tmsnrt.rs/2egbfVh
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>