© Reuters. A man displays US dollar bills after withdrawing cash from a bank in Harare
By Stanley White and Sagarika Jaisinghani
TOKYO (Reuters) – The dollar hovered near the three-month high on Monday after the passage of a bumper stimulus package by the U.S. Senate triggered another sell-off in the bond market, while major commodity exporters’ currencies acted as broader risk-on-trade went back lost momentum.
It stood at 92.073 versus a six major currency basket, up 0.17% and near the three-month high of 92,201 set on Friday.
The Senate passed a $ 1.9 trillion COVID-19 relief plan the day after a formidable U.S. employment report brought the greenback to its highest level since November 2020.
“The dollar is in demand as the United States is the most service-intensive economy in the world. Once the reopening is in full swing, it will be the icing on the cake,” said Stephen Innes, chief strategist for global markets at Axi.
While investors have shifted towards a faster economic recovery this year, concerns over higher inflation have pushed bond yields higher despite assurances from central banks, including the US Federal Reserve, that monetary policy will remain loose.
The benchmark’s 10-year US Treasury bond yield hovered near the one-year high on Monday, while US Nasdaq futures fell about 1% and European stock index futures reduced gains as the sell-off spread to other risk-weighted assets. [MKTS/GLOB]
Speculators reduced their net short dollar positions to $ 27.80 billion last week. This is the smallest short position since Dec 15th and suggests that dollar bears are giving up betting against the greenback. [IMM/FX]
The dollar stayed near a monthly high against the British pound, trading at $ 1.3819, and a three-month high against the euro, trading at $ 1.1904.
Against the low-yielding yen, the greenback remained stable at 108.39 yen after hitting a nine-month high of 108.645 on Friday.
“A bigger setback from other central banks on their respective bond markets last week than the Fed reported has given rise to the dollar’s expansion,” said Innes.
sank to more than two-month lows, with the recovery of the dollar and US yields causing many investors to reevaluate predictions for the yuan, which the market had expected to be stronger for the remainder of this year. [CNY/]
The Australian dollar rose 0.2% to $ 0.7696 but was well below its session high of $ 0.77230. The New Zealand dollar fell about 0.1% after previously rising 0.4% to $ 0.719. The antipodal currencies were in demand because of their links to global commodity trading.
The US currency fell 0.38% against the Norwegian krone to 8.5283 and fell slightly to 1.2637 Canadian dollars as traders bought oil exporters’ currencies.
Some traders said a jump in futures above $ 70 a barrel for the first time in more than a year sparked a spate of commodity currency bids as Asian trading began.
Bid prices at 0430 GMT
Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid
Euro / Dollar $ 1.1904 $ 1.1908 -0.05% -2.59% +1.1932 +1.1899
Dollar / Yen 108.3950 108.2600 + 0.12% + 4.93% + 108.4850 + 108.3450
Euro / Yen 129.03 129.09 -0.05% + 1.66% + 129.3900 + 128.9800
Dollar / Swiss 0.9318 0.9311 + 0.08% + 5.33% + 0.9319 + 0.9299
Pound sterling / dollar 1.3821 1.3831 -0.09% + 1.15% +1.3864 +1.3810
Dollars / Canadians 1.2654 1.2649 + 0.05% -0.62% +1.2663 +1.2624
Aussie / dollar 0.7696 0.7680 + 0.21% + 0.05% + 0.7722 + 0.7686
NZ 0.7158 0.7165 -0.10% -0.32% +0.7190 +0.7152
Dollar / dollar
Tokyo Forex Market Information from BOJ