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* Dollar rises after U.S. says Osama Bin Laden killed
* But greenback climb seen as temporary, knee-jerk reaction
* Trade illiquid as many Asia markets on holiday
By Hideyuki Sano
TOKYO, May 2 (Reuters) - The U.S. dollar rebounded from a three-year low against a basket of currencies on Monday as news that a U.S.-led operation had killed al Qaeda leader Osama bin Laden prompted short-covering in a heavily-sold greenback, though traders think any impact will be temporary.
The currency was due for a corrective rebound, dealers said, with players having sold the dollar against pretty much everything from the euro and commodity currencies to oil and precious metals for the past few weeks.
Still, perceptions that the U.S. central bank's stimulative policy stance will continue to cheapen its value is likely to keep hurting the dollar, they said.
In a knee-jerk reaction to the news that Al Qaeda leader Osama bin Laden was killed on Sunday in a firefight with U.S. forces in Pakistan and his body was recovered, the dollar was bought back broadly.
U.S. stock futures price rose while oil prices fell, though illiquid trading conditions due to holidays in many markets in Asia and the UK on Monday are exaggerating price moves.
"Although some could argue that this news has taken out one risk factor for the global economy, my overall impression is that Osama bin Laden already seemed like he was from a page in a history book," said Katsunori Kitakura, chief dealer at Chuo Mitsui Trust Bank.
"The dollar's probably been bought back as dollar-selling had gone a bit too far. But there's no change in the fact that the Fed's exit (from its easy policy) will still be some way off," he added.
The dollar index <.DXY> <=USD> rose about 0.2 percent to 73.152, after falling to 72.813, a fresh three-year low in earlier trade.
As the index has continued to slide for the past two weeks and logged a decline of almost 4 percent in April, a fall big enough to cause worries about speed correction. Some oscillators, such as the 14-day RSI, showed the dollar was oversold in the near term.
Highlighting how much market players are going short on the dollar, data from the U.S. Commodity Futures Trading Commission released on Friday showed currency speculators boosted bets against the greenback in the week ended April 26.
Their euro long positions rose to 68,279 contracts, the highest since December 2007, from 62,195 contracts the previous week.
The euro stood at $1.4792
The Australian dollar had a rollercoaster ride, falling
about 0.2 percent
A staggeringly sharp fall in silver has also prompted profit-taking in high-flying commodity currencies, such as the Aussie and the Canadian dollar, and served as a reminder of how a reversal in positioning can cause massive swings.
The price of silver
"If adjustment is confined to just silver, it won't be a big deal. But if this moves spills over to other commodities, that could certainly hurt commodity currencies, such as the Australian dollar and the Canadian dollar. And we could see a rebound in the U.S. dollar," said Koji Fukaya, chief strategist at Credit Suisse in Tokyo.
The U.S. dollar slipped rose 0.4 percent to 81.50 yen
Some players are ready to buy the dollar above 80.90 yen, a 50 percent retracement of its rise from a record low of 76.25 to a high of 85.53 hit in early April, market players said.
The dollar also gained 0.5 percent against the safe-haven
Swiss franc to 0.8694 franc
. (Editing by Joseph Radford)