{"id":109388,"date":"2021-03-12T10:36:54","date_gmt":"2021-03-12T10:36:54","guid":{"rendered":"https:\/\/fin2me.com\/?p=109388"},"modified":"2021-03-12T10:36:54","modified_gmt":"2021-03-12T10:36:54","slug":"dollar-gains-riskier-currencies-lose-out-as-u-s-yields-rise-again","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/dollar-gains-riskier-currencies-lose-out-as-u-s-yields-rise-again\/","title":{"rendered":"Dollar gains, riskier currencies lose out as U.S. yields rise again"},"content":{"rendered":"
LONDON (Reuters) – The dollar rose on Friday, recovering its losses from the day before, as a spike in Treasury yields early in the European session triggered a risk-off move in global currency markets, with riskier currencies taking a hit.<\/p> Market participants have grown wary in recent weeks that there could be a spike in inflation caused by massive fiscal stimulus and pent-up consumer demand when economies reopen from their coronavirus lockdowns.<\/p>\n Although soft U.S. CPI data on Wednesday went some way to calm those fears, U.S. Treasuries sold off again on Friday, with the 10-year yield rising above 1.6%.<\/p>\n The dollar was up 0.4% on the day at 0840 GMT, at 91.835. But it was still below the high of 92.506 it reached on Tuesday, which was its strongest since November 2020.<\/p>\n \u201cThere is concern over inflation in the months ahead and that sense is dollar-supportive,\u201d said Neil Jones, head of FX sales at Mizuho.<\/p>\n \u201cIt looks like pretty upbeat in the United States in terms of rollout of further vaccine plays, and of course that feeds into the economic recovery in the States, and a time when fiscal stimulus is extremely high, monetary stimulus is extremely high,\u201d he said.<\/p>\n President Joe Biden told U.S. states on Thursday to make all adults eligible for a coronavirus vaccine by May 1, hours after he signed a $1.9 trillion stimulus bill into law.<\/p>\n The dollar index was still on track to end the week down by around 0.1% and Mizuho\u2019s Jones said he thought the strengthening on Friday was likely to be temporary.<\/p>\n \u201cMy personal view is that the dollar is not on a trajectory for a higher fundamental trend,\u201d he said.<\/p>\n Riskier currencies lost out, erasing recent gains. The Australian dollar – which is seen as a liquid proxy for risk appetite – fell by 0.5% to 0.77457 versus the U.S. dollar at 0841 GMT.<\/p>\n The New Zealand dollar was down around 0.6% against the U.S. dollar. The Norwegian crown lost out to both euro and dollar.<\/p>\n The European Central Bank said on Thursday that it would increase the pace of its money printing to prevent a rise in euro zone bond yields.<\/p>\n Although the euro was down around 0.5% at $1.19325 at 0841 GMT, it was still set to end the week up 0.2% overall.<\/p>\n Market attention now turns to the U.S. Federal Reserve\u2019s meeting next week, where traders will be looking for any comments about rising yields.<\/p>\n ING strategists wrote in a note to clients that the market will probably wait until after the Fed\u2019s meeting before pushing the dollar index into 90 and 91 territory.<\/p>\n Dollar-yen was up around 0.6%, changing hands at 109.140 at 0842 GMT. That\u2019s close to the peak of 109.235 reached on Tuesday, which had been the yen\u2019s weakest since June 2020.<\/p>\n The dollar was gaining some support versus Asian currencies because of rising U.S.-China tensions, said Derek Halpenny, head of research at MUFG.<\/p>\n The Biden administration amended licenses for companies to sell to China\u2019s Huawei, further restricting companies from supplying items that can be used with 5G devices.<\/p>\n Elsewhere, bitcoin traded around $56,738 at 0838 GMT, having come close to, but not exceeded, its recent record high of $58,354.14.<\/p>\n