* Dollar gained most in two months overnight as positions
unwound
* Many analysts see dollar resuming decline on increased
stimulus
* Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E
By Kevin Buckland
TOKYO, Jan 8 (Reuters) - The dollar held on to its biggest
gain in more than two months against its major peers on Friday
as a rise in U.S. yields triggered some unwinding of bearish
bets on the currency.
The greenback bounced off a nearly three-year low, with
traders taking profits against the euro in particular, following
a slide in the dollar index of nearly 7% in 2020 and as much as
0.9% in the new year amid expectations of U.S. fiscal stimulus.
Democrats won effective control of the Senate this week,
giving President-elect Joe Biden scope to push through more
spending, which analysts say will be negative for bonds and the
dollar.
The benchmark 10-year Treasury yield topped 1% on Wednesday
for the first time since March.
"There were some aggressive dollar shorts being bought
back," said Bart Wakabayashi, Tokyo branch manager of State
Street Bank and Trust.
"The selloff in Treasuries provided a trigger."
Investors now await U.S. nonfarm payrolls later on Friday
for clues on whether significantly more stimulus will be needed
to keep the economic recovery alive.
The dollar index was little changed at 89.859 in
Asian trading, after dipping to an almost three-year low of
89.206 on Wednesday. It rose more than half a percent on
Thursday, but remains on track for a weekly decline.
The euro was mostly flat at $1.22605 following
Thursday's 0.5% drop.
The riskier Aussie dollar was also little changed at
77.70 U.S. cents after sliding 0.5% in the previous session.
The greenback bought 103.900 yen after gaining
0.7% to close at 103.830 in New York.
"The U.S. payrolls report might be viewed as a potential
litmus test for USD bears," TD Securities analysts wrote in a
client note.
"Positioning is stretched and the backup in U.S. yields has
some investors nervous. Our call for a negative print might not
be large enough to trigger a liquidation in shorts, but we think
a defensive posture is tactically warranted nonetheless."
Bitcoin slid 3.3% to $36,198, and dipped as low
as $36,618.36, a day after smashing through $40,000 for the
first time.
The world's most popular digital currency soared as high
as$40,420 on Thursday, less than a month after crossing the
$20,000 milestone on Dec. 16.
========================================================
Currency bid prices at 2:53PM (553 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar $1.2260 $1.2270 -0.08% +0.34% +1.2272 +1.2235
Dollar/Yen 103.8870 103.8300 +0.05% +0.57% +103.9850 +103.7850
Euro/Yen 127.39 127.37 +0.02% +0.37% +127.4300 +127.2300
Dollar/Swiss 0.8857 0.8855 +0.03% +0.12% +0.8871 +0.8851
Sterling/Dollar 1.3560 1.3565 +0.04% -0.67% +1.3571 +1.3540
Dollar/Canadian 1.2678 1.2690 -0.08% -0.42% +1.2700 +1.2677
Aussie/Dollar 0.7771 0.7769 +0.04% +1.03% +0.7775 +0.7741
NZ 0.7260 0.7256 +0.11% +1.16% +0.7265 +0.7240
Dollar/Dollar All spots
Tokyo spots
Europe spots
Volatilities
Tokyo Forex market info from BOJ
(Editing by Sam Holmes and Kim Coghill)
.Source
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