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FOREX-Dollar claws back some losses as U.S. yields stabilise

Published 10/03/2021, 02:10 pm
Updated 10/03/2021, 02:12 pm
© Reuters.
EUR/USD
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USD/JPY
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USD/CHF
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AUD/USD
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NZD/USD
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DX
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US10YT=X
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BTC/USD
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BTC/USD
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* Commodity currencies pare big advances from overnight

* Bitcoin retreats after earlier topping $55,000

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

TOKYO, March 10 (Reuters) - The U.S. dollar rose on Wednesday, clawing back some of the losses sustained overnight, as U.S. yields found a floor following their drop from one-year highs.

Riskier currencies including the Australian and New Zealand dollars retreated following big gains on Tuesday. Bitcoin BTC=BTSP turned lower after earlier topping $55,000 for the first time since Feb. 22.

The safe-haven dollar has closely tracked a surge in Treasury yields in recent weeks, both because higher yields increase the currency's appeal and as the bond rout shook investor confidence, spurring demand for the safest assets.

The benchmark 10-year Treasury yield US10YT=RR stabilised around 1.54% on Wednesday in Asia after a three-day drop from a one-year high of 1.6250%.

The dollar index =USD strengthened about 0.2% to 92.137 in Asia on Wednesday, after falling back sharply from a 3-1/2-month high of 92.506 overnight.

Bond investors have been selling on bets that a faster-than-expected economic rebound would spark a surge in inflation, with President Joe Biden expected to sign a $1.9 trillion coronavirus aid package as soon as this week. analysts still expect the dollar to weaken over the course of this year, but the speed of recent gains has forced some to adjust their views.

Westpac, which as recently as last week was talking about selling the dollar index into 91, now sees it reaching as high as 94.50 before resuming last year's downtrend as the rest of the world closes the gap with the U.S.'s pandemic recovery.

"Global reflation is alive and well, and Europe will get her vaccination act together at some point too," Westpac strategists wrote in a note Wednesday.

"A continuation of the global recovery ... should see commodity currencies outperform."

The Aussie AUD= dropped 0.4% to $0.7684 after jumping 1% overnight.

New Zealand's kiwi NZD= slipped 0.4% to $0.7146 following Tuesday's 0.8% increase.

The euro EUR=EBS was 0.2% lower at $1.18810 after bouncing off a 3 1/2-month low of $1.18355 on Tuesday.

Against the yen JPY=EBS , another traditional safe haven currency, the greenback traded 0.3% higher at 108.815, following its retreat from a nine-month top of 109.235.

In cryptocurrencies, bitcoin BTC=BTSP rose as high as $55,855 on Wednesday before dropping back to $53,995. It reached a record high of $58,354.14 on Feb. 21.

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Currency bid prices at 256 GMT Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=EBS

$1.1881

$1.1901

-0.16%

-2.75%

+1.1904

+1.1878 Dollar/Yen

JPY=D3

108.8070

108.5100

+0.28%

+5.35%

+108.8220 +108.5250 Euro/Yen

EURJPY=

129.28

129.10

+0.14%

+1.86%

+129.3100 +129.0700 Dollar/Swiss

CHF=EBS

0.9301

0.9280

+0.22%

+5.12%

+0.9301

+0.9279 Sterling/Dollar GBP=D3

1.3861

1.3889

-0.18%

+1.48%

+1.3891

+1.3861 Dollar/Canadian CAD=D3

1.2663

1.2640

+0.22%

-0.52%

+1.2666

+1.2635 Aussie/Dollar

AUD=D3

0.7681

0.7721

-0.50%

-0.14%

+0.7718

+0.7678 NZ

NZD=D3

0.7146

0.7176

-0.39%

-0.46%

+0.7181

+0.7147 Dollar/Dollar

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates

https://tmsnrt.rs/2RBWI5E

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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