LONDON, May 17 Reuters The dollar eased for a third straight day on Tuesday as a jump in sentiment across global markets encouraged investors to trim bets on the safe haven currency, which hit a twodecade high last week.

A hawkish comment from Dutch central bank chief Klaas Knot helped the euro jump back above 1.05 for the first time since Thursday, brushing off fears the common currency was on course for imminent parity with the dollar.

Knot said that not only was the European Central Bank set to hike by 25 basis point in July, the central bank was also ready to consider a bigger hike if inflation proved higher than expected.

Following these comments, the euro swiftly doubled its gains to 0.8 to 1.0527.

The currency had already benefited from ECB policymaker Francois Villeroy de Galhau arguing on Monday that a weak euro could threat price stability in the currency bloc.

Worries that escalating tensions with Russia could lead to a gas embargo, a recession in the euro zone and prevent the ECB from lifting interest rates, have weighed on the common currency39;s prospects.

Sterling also took advantage of the softer dollar to jump back its highest level since May 5 after strong labour market data reinforced expectations that the Bank of England would continue to raise rates to fight inflation.

The Australian dollar rose 0.87 to 0.7032, recovering further from a twoyear low touched last week, and could get an extra boost from interest rate expectations if wage data…