* Dollar index posts biggest one-day rally in over a month
* Aussie bulls eye labour force data at 0130 GMT
By Ian Chua
SYDNEY, April 14 (Reuters) - The dollar was broadly firmer
early on Thursday, having posted its biggest one-day gain in
more than a month as an improvement in global sentiment led
investors to trim bearish positions.
The Federal Reserve has highlighted global uncertainty as
the major bar to another hike in interest rates. So, when upbeat
China trade data and a pick up in commodity prices seemed to
lessen the risk of a deeper world downturn, dollar bulls figured
there was now more chance of a move.
Analysts at CitiFX said recent developments might serve as
"foundational encouragement" for investors to warm up to the
idea of pricing in more tightening.
The dollar index .DXY rallied nearly 1 percent overnight
and was last at 94.744. The greenback popped back above 109.00
yen JPY= , pulling well away from a 17-month trough of 107.63
set a few days ago.
Beating a hasty retreat, the euro skidded to $1.1273 EUR=
from a six-month high of $1.1465.
Just this week, Richmond Fed President Jeffrey Lacker, San
Francisco Fed President John Williams and Philadelphia Fed
President Patrick Harker all suggested that several hikes were
possible this year.
Fed funds futures 0#FF: are barely pricing in one hike
this year, let alone multiple tightenings after recent dovish
comments from core Fed members led by Chair Janet Yellen.
In an interview with Time magazine published on Wednesday,
Yellen again highlighted a cautious approach to monetary policy,
saying the U.S. central bank must try to avoid making "big
mistakes".
An unexpected fall in U.S. retail sales in March supported
Yellen's cautious approach. The disappointing data contributed
to a fall in U.S. yields, yet it failed to dent the rallying
dollar.
Similarly wary, the Bank of Canada warned of weaker global
growth and a less favourable U.S. outlook as it held interest
rates steady. It raised growth forecasts for 2016, but nudged
them lower for 2017.
The Canadian dollar stepped back to C$1.2808 per USD
CAD=D4 , from a nine-month peak of C$1.2744.
Other commodity currencies also ceded ground to the
greenback. The Aussie AUD=D4 dipped below 77 U.S. cents after
coming within a whisker of its 2016 peak of $0.7723.
Traders said Australia's labour force data due at 0130 GMT
could re-energise the Aussie should the numbers come in on the
strong side. ECONAU
For the rest of the market, the key focus will be on China's
first quarter gross domestic product and March industrial output
and retail sales due on Friday. ECONCN
Investors will be looking for more signs of stabilisation in
the world's second-largest economy, following Wednesday's upbeat
trade data.