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Safe-haven dollar wallows near one-week low as bond yields retreat

Forex43 minutes ago (Mar 11, 2021 08:30PM ET)

(C) Reuters. FILE PHOTO: A picture illustration shows U.S. 100 dollar bank notes taken in Tokyo

By Kevin Buckland

TOKYO (Reuters) – The safe-haven dollar languished near a one-week low on Friday as calming bond markets lifted investor sentiment and appetite for Asian currencies.

The commodity-linked Australian and New Zealand dollars traded close to one-week highs reached overnight as inflation fears ebbed, sending Wall Street stocks to record highs.

Cryptocurrency bitcoin briefly rose above $58,000, approaching a record high.

The dollar index wallowed just north of the 91.364 level touched overnight for the first time since Feb. 4. It has dropped around 0.6% this week, after retreating from a more than three-month high of 92.506 reached Tuesday.

The gauge remains 1.6% higher this year as it tracked benchmark 10-year Treasury yields from below 1% to as high as 1.625% at the end of last week, before their retreat to around 1.5% currently.

A benign consumer price index reading this week helped allay fears that increased fiscal stimulus and sustained ultra-easy monetary policy could lead the U.S. recovery to overheat.

Weekly employment data overnight, meanwhile, added to positive signals from the jobs market, as President Joe Biden signed his $1.9 trillion pandemic relief bill into law.

“Risk sentiment is back in the ascendancy,” Ray Attrill, head of forex strategy at National Australia Bank (OTC:NABZY), wrote in a client note.

“A 1.5% rather than 1% risk-free rate is evidently no longer a problem for risk assets,” although for the dollar, “it still looks a bit premature to call a resumption of the 2020 downtrend with any degree of conviction.”

The Aussie traded at $0.77865, on the cusp of the one-week high of $0.7793 reached Thursday. New Zealand’s kiwi changed hands at $0.7223, near the one-week high of $0.7240 from overnight.

The euro also traded close to a one-week high of $1.1990.

On Thursday, the European Central Bank said it was ready to accelerate money-printing to keep eurozone yields down.

The dollar consolidated at around 108.60 yen, another safe-haven currency, after pulling back from a nine-month high of 109.235 reached on Tuesday.

Bitcoin last traded at $57,185.71, up more than 12% for the week, after topping $58,000 on Thursday for the first time since it set a record high at $58,354.14 on Feb. 21.

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Currency bid prices at 048 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar $1.1982 $1.1986 -0.02% -1.92% +1.1988 +1.1980

Dollar/Yen 108.5670 108.4150 +0.00% +4.96% +108.5770 +0.0000

Euro/Yen 130.09 130.02 +0.05% +2.50% +130.1300 +130.0400

Dollar/Swiss 0.9249 0.9247 +0.02% +4.54% +0.9251 +0.9247

Sterling/Dollar 1.3990 1.3994 -0.04% +2.39% +1.3992 +1.3988

Dollar/Canadian 1.2529 1.2536 -0.04% -1.59% +1.2535 +1.2530

Aussie/Dollar 0.7786 0.7787 -0.01% +1.22% +0.7790 +0.7782

NZ 0.7223 0.7227 -0.06% +0.58% +0.7231 +0.7223

Dollar/Dollar

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ

Safe-haven dollar wallows near one-week low as bond yields retreat

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