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FOREX-Dollar hovers near three-month high as bonds sell off; risk currencies pare gains

Published 08/03/2021, 04:17 pm
Updated 08/03/2021, 04:18 pm
EUR/USD
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USD/JPY
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USD/CHF
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USD/NOK
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DX
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LCO
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* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

* U.S. stimulus, jobs data give dollar a boost

* Euro near 3-month low, yen at 9-month low

* Commodity currencies gain early after Brent rises (Adds comments; updates prices)

By Stanley White and Sagarika Jaisinghani

TOKYO, March 8 (Reuters) - The dollar hovered near three-month highs on Monday after the U.S. Senate passage of a bumper stimulus bill sparked another sell-off in the bond market, while currencies of major commodity exporters pulled back as a broader risk-on trade lost momentum.

The dollar index =USD stood at 92.073 against a basket of six major currencies, up 0.17% and near its three-month high of 92.201 set on Friday.

The Senate passed a $1.9 trillion COVID-19 relief plan, a day after a stunning U.S. jobs report sent the greenback to its highest level since November 2020. dollar is in demand as the United States is the most services-heavy economy globally, and once the reopening narrative goes in full swing, that will provide the icing on the cake," said Stephen Innes, chief global markets strategist at Axi.

While investors have increased bets on a faster economic rebound this year, concerns about higher inflation have pushed up bond yields despite assurances from central banks including the U.S. Federal Reserve that monetary policy will stay loose.

The yield on the benchmark U.S. 10-year Treasuries US10YT=TWEB hovered near one-year highs on Monday, while U.S. Nasdaq futures NQcv1 fell about 1% and European stock index futures STXc1 pared gains as the selloff also spread to other risk assets. MKTS/GLOB

Speculators cut their net short dollar positions in the latest week to $27.80 billion, which is the smallest short position since Dec. 15 and suggests that dollar bears are giving up on betting against the greenback. IMM/FX

The dollar held near a one-month high against the British pound, which traded at $1.3819 GBP=D4 , and a three-month high against the euro, which stood at $1.1904 EUR= .

Against the low-yielding yen JPY=EBS , the greenback held steady at 108.39 yen, having hit a nine-month high of 108.645 on Friday.

"More significant pushback from other central banks to their respective bond markets over the last week than the Fed provided has given reason for the dollar move to broaden out," Innes said.

China's yuan CNY=PBOC eased to a more-than-two-month low, with the bounce in the dollar and U.S. yields prompting many investors to re-evaluate forecasts for the yuan, which the market had expected to be stronger for the remainder of this year. CNY/

The Australian dollar AUD=D3 rose 0.2% to $0.7696, but was well off its session high of $0.77230. The New Zealand dollar NZD=D3 was down about 0.1% after earlier rising 0.4% to $0.719. The antipodean currencies have been in demand because of their links to the global commodities trade.

The U.S. currency fell 0.38% against the Norwegian crown NOK= to 8.5283 and eased slightly to 1.2637 Canadian dollars as traders bought the currencies of oil exporters.

Some traders said a jump in Brent crude futures LCOc1 above $70 a barrel for the first time in more than a year triggered a flurry of bids for commodity currencies at the start of Asian trading.

========================================================

Currency bid prices at 0430 GMT Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=EBS

$1.1904

$1.1908

-0.05%

-2.59%

+1.1932

+1.1899 Dollar/Yen

JPY=D3

108.3950

108.2600

+0.12%

+4.93%

+108.4850 +108.3450 Euro/Yen

EURJPY=

129.03

129.09

-0.05%

+1.66%

+129.3900 +128.9800 Dollar/Swiss

CHF=EBS

0.9318

0.9311

+0.08%

+5.33%

+0.9319

+0.9299 Sterling/Dollar GBP=D3

1.3821

1.3831

-0.09%

+1.15%

+1.3864

+1.3810 Dollar/Canadian CAD=D3

1.2654

1.2649

+0.05%

-0.62%

+1.2663

+1.2624 Aussie/Dollar

AUD=D3

0.7696

0.7680

+0.21%

+0.05%

+0.7722

+0.7686 NZ

NZD=D3

0.7158

0.7165

-0.10%

-0.32%

+0.7190

+0.7152 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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