TOKYO (Reuters) – The U.S. dollar rose Wednesday, reversing some of the overnight sustained losses, as U.S. output found a floor after falling from one-year highs.
Riskier currencies including Australian and New Zealand dollars escaped after big gains on Tuesday. Bitcoin turned lower after peaking at $ 55,000 for the first time since February 22nd.
The safe dollar has been closely monitoring increases in Treasury yields in the past few weeks, both due to higher yields increasing the attractiveness of the currency and how the bond bond shakes investor confidence, spewing demand for the safest funds.
Finance’s 10-year benchmark yield hit around 1.54% Wednesday in Asia after a three-day fall from a year-high of 1.6250%.
The dollar index strengthened around 0.2% to 92.137 in Asia on Wednesday, after falling abruptly from a 3-1 / 2-month high of 92.506 overnight.
Bond investors have been betting that a faster-than-expected economic recession would lead to a rise in inflation, with President Joe Biden expected to sign a $ 1.9 trillion coronavirus aid package as soon as possible to this week.
Many analysts still expect the dollar to weaken over this year, but the recent pace of gains has led some to change their views.
Westpac, which so far last week talked about selling the dollar index to 91, is now seeing it reach as high as 94.50 before starting again at a recession last year as the rest of the world closes the gap with a diffuse U.S. recovery.
“Global recovery is alive and well, and Europe will get its vaccine together at some point,” Westpac strategists wrote in a note on Wednesday.
“By continuing the global recovery … commodity currencies should perform better.”
The Aussie fell 0.4% to $ 0.7684 after jumping 1% overnight.
New Zealand kiwi slipped 0.4% to $ 0.7146 after a 0.8% rise on Tuesday.
The euro was 0.2% lower at $ 1.18810 after kicking off the 1 1/2-month low of $ 1.18355 on Tuesday.
Against the yen, another traditional safe haven currency, the greenback traded 0.3% higher at 108.815, after rebounding from a nine – month high of 109.235.
In cryptocurrencies, bitcoin rose as high as $ 55,855 on Wednesday before returning to $ 53,995. It peaked at $ 58,354.14 on February 21st.
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Cash offer prices at 256 GMT
RIC Description Last US Close Pct Change YTD Pct High Bid Low Bid
Previous change
Session
Euro / Dollar $ 1.1881 $ 1.1901 -0.16% -2.75% +1.1904 +1.1878
Dollar / Yen 108.8070 108.5100 + 0.28% + 5.35% +108.8220 +108.5250
Euro / Yen 129.28 129.10 + 0.14% + 1.86% +129.3100 +129.0700
Dollar / Switzerland 0.9301 0.9280 + 0.22% + 5.12% +0.9301 +0.9279
Sterling / Dollar 1.3861 1.3889 -0.18% + 1.48% +1.3891 +1.3861
Dollar / Canada 1.2663 1.2640 + 0.22% -0.52% +1.2666 +1.2635
Aussie / Dollar 0.7681 0.7721 -0.50% -0.14% +0.7718 +0.7678
NZ 0.7146 0.7176 -0.39% -0.46% +0.7181 +0.7147
Dollars / Dollars
All spots
Spotan Tokyo
Europe spots
Vulnerability
Tokyo Forex market information from BOJ
Reciting with Kevin Buckland; Edited by Lincoiln Feast and Christopher Cushing