Dollar perches three-and-a-half-month highs on firmer US yields By Reuters

By Saikat Chatterjee

LONDON Reuters) – The US dollar hit a 3-1 / 2-month high on Monday as rising US Treasury yields scared investors and increased the appeal of the greenback’s safe havens.

After falling 4% in the last quarter of 2020, the dollar has strengthened nearly 2.5% year-to-date as investors predict that the sharp rise in U.S. bond yields will weigh on stock valuations strained and will stimulate demand for the US dollar.

Recent economic figures also support US data showing non-farm payrolls jumped by 379,000 jobs last month, as the US Senate approved President Joe Biden’s $ 1.9 trillion recovery package.

“The US labor market is healing fast, President Biden’s gargantuan relief package has been approved by the Senate and America has stepped up its vaccination game by administering a record number of vaccines this weekend,” said Marios Hadjikyriacos , investment analyst at XM. .

But as U.S. yields climbed within reach of a one-year high above 1.62% reached on Friday, German rates fell nearly 5 basis points last week, pulling the euro to a nearly four-month low below $ 1.19.

BofA analyst Athanasios Vamvakidis said the powerful mix of US stimulus, faster reopening and greater consumer firepower was a definite plus for the dollar.

The stood at 92.30 against a basket of six major currencies, up 0.4%, its highest level since late November.

The Australian dollar weakened 0.3% to $ 0.7658. The New Zealand dollar lost around 0.8%.

The currencies were in demand because of their links to global commodity trade, but the dollar rebound hampered them.

The dollar held close to a one-month high against the British pound at $ 1.3819. Against the weak-yielding yen, the greenback remained firmer at 108.56 yen, after hitting a nine-month high of 108.645 on Friday.

Chart: USD positions – https://fingfx.thomsonreuters.com/gfx/mkt/qmypmwdgzpr/USD%20positions.JPG