* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Saikat Chatterjee
LONDON, April 21 (Reuters) - The U.S. dollar rose on Wednesday from a seven-week low hit overnight, as broad weakness in stock markets triggered by a resurgence of COVID-19 cases in countries from India to Japan fuelled renewed appetite for the safe-haven appeal of the greenback.
The safety bid also supported the Swiss franc and the Japanese yen as the outlook for the global economy soured.
The greenback has weakened more than 2% in April after a strong March rally as investors bet that a global economic recovery premised on a speedy rollout of vaccines would fuel demand for non-dollar currencies like the euro and the Aussie.
The dollar index, which tracks the U.S. currency against six major peers, was up 0.11% at 91.321 in London trading after slumping as low as 90.856 on Tuesday for the first time since March 3.
The greenback's bounce was also accompanied by softer U.S. Treasury yields as investors weighed the surge in COVID-19 cases against a broad-based selloff in the U.S. dollar in recent weeks despite strong U.S. employment and retail sales data.
Thu Lan Nguyen, a strategist at Commerzbank said more positive U.S. data could easily kick-start another dollar rally, particularly if the uneven pace of vaccinations fuels greater demand for U.S. Treasuries as a hedge against a crisis.
"So for now, U.S. dollar bears should make sure that they don’t get excited too soon," she said in a note.
The benchmark 10-year Treasury yield was around 1.58%, not far from its lowest since mid-March, as it continued to consolidate following its retreat from the 14-month high at 1.7760% reached at the end of last month.
The biggest casualty of the dollar's rise in London trading was the euro with the single currency weakening 0.25% at $1.2000, after touching a seven-week high of $1.2079 overnight.
While the euro has benefited from the dollar's weakness in recent weeks, Georgette Boele, an economist at ABN Amro believes the euro is likely to weaken further in coming days due to U.S. economic outperformance and repricing of ECB rate expectations.
She expects the euro to weaken to $1.15 by the end of 2021.
The European Central Bank decides policy on Thursday, with the Federal Reserve following next week.
Declines in U.S. yields and the dollar in April have come as evidence mounted that the Fed would be slower in tightening monetary policy than it had appeared to the market.
Broadly, pandemic developments triggered investor caution.
India reported its highest daily toll of 1,761 deaths from COVID-19, while Canada and the United States extended a land-border closure for non-essential travellers.
The Australian dollar, a barometer for risk appetite, nursed losses at $0.7717 after weakening 0.4% overnight.
In cryptocurrencies, bitcoin traded around $55,000, consolidating following its dip to as low as $51,541.16 on Sunday. It set a record high at $64,895.22 on April 14.
(Reporting by Saikat Chatterjee; Editing by Barbara Lewis and Hugh Lawson)