(Recasts with move after comments from Fed's Powell, adds
quotes, updates prices, adds data outlook)
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Karen Brettell
NEW YORK, March 4 (Reuters) - The dollar surged to
three-month highs on Thursday after Federal Reserve Chairman
Jerome Powell failed to express concern about a recent sell-off
in U.S. Treasuries as some traders had expected, resulting in
higher bond yields and demand for the greenback.
Powell set aside concern that a recent move up in U.S.
Treasury yields might spell trouble for the Fed as investors
push up borrowing costs the central bank wants to keep low.
While Powell said the increase was "notable and caught my
attention," he did not consider it a "disorderly" move, or one
that pushed long-term rates so high the Fed might have to
intervene in markets more forcefully to bring them down, such as
by increasing its $120 billion in monthly bond purchases.
Some investors expected Powell to “at least acknowledge that
there is some concern regarding the pop in yield, which he
didn't do,” said Minh Trang, senior FX trader at Silicon Valley
Bank in Santa Clara, California.
“Overall his message remains the same, which is essentially
they will maintain looser monetary policy until the economy
shows consistent strength and we get back closer to what we were
pre-pandemic in regards to both inflation and the labor market,”
Trang said.
The dollar index =USD was last up 0.53% at 91.561, after
getting as high as 91.663, the highest since Dec. 1. The euro
EUR=EBS dipped 0.73% to $1.1973, the lowest since Feb. 5.
Benchmark 10-year Treasury yields US10YT=RR got as high as
1.555% but are holding below a one-year high of 1.614% reached
last week.
The dollar has gained along with U.S. government bond yields
as impending U.S. fiscal stimulus adds fuel to expectations of
higher inflation and the rollout of vaccines against COVID-19
heightens optimism that the economy headed for recovery.
"The U.S. is assuming the leadership position on growth
matters, fiscal dominance and certainly vaccinations," said
Mazen Issa, senior FX strategist at TD Securities in New York.
Jobs data for February on Friday is the next major U.S.
economic focus.
The Swiss franc and the Japanese yen continued their recent
weakness. They have been hurt expectations the U.S. will lead
global growth, which some analysts are calling U.S.
exceptionalism.
"The traditional (funding currencies) like euro, yen and
Swiss, look to be particular laggards in that environment under
a higher U.S. yield backdrop," said TD's Issa.
The franc CHF=D3 weakened as far as 0.9297, the lowest
since July 23. The yen JPY=D3 reached 107.93, its weakest
since July 1.
Higher-risk currencies, including the Australian dollar, by
contrast, are positioned to outperform as global growth
improves. The Aussie AUD=D3 gave back earlier gains on
Thursday, however, as stocks fell. It was last down 0.57% on the
day at $0.7730, and is holding below three-year highs of $0.8007
reached last week.
In the cryptocurrency market, bitcoin BTC=BTSP fell 5.36%
to $47,691. Ether ETH=BTSP dropped 3.21% to $1,518.
========================================================
Currency bid prices at 2:53PM (1953 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 91.5610 91.0970 +0.53% 1.756% +91.6630 +90.9700
Euro/Dollar EUR=EBS $1.1973 $1.2062 -0.73% -2.00% +$1.2065 +$1.1966
Dollar/Yen JPY=D3 107.8550 106.9600 +0.87% +4.45% +107.8950 +106.9900
Euro/Yen EURJPY= 129.13 129.08 +0.04% +1.74% +129.6300 +128.9200
Dollar/Swiss CHF=EBS 0.9290 0.9200 +0.98% +5.01% +0.9298 +0.9190
Sterling/Dollar GBP=D3 $1.3897 $1.3950 -0.33% +1.77% +$1.4016 +$1.3884
Dollar/Canadian CAD=D3 1.2651 1.2656 -0.03% -0.64% +1.2693 +1.2575
Aussie/Dollar AUD=D3 $0.7730 $0.7775 -0.57% +0.49% +$0.7814 +$0.7709
Euro/Swiss EURCHF= 1.1124 1.1094 +0.27% +2.93% +1.1151 +1.1077
Euro/Sterling EURGBP= 0.8613 0.8642 -0.34% -3.63% +0.8655 +0.8597
NZ NZD=D3 $0.7195 $0.7246 -0.69% +0.21% +$0.7272 +$0.7173
Dollar/Dollar
Dollar/Norway NOK=D3 8.5750 8.4915 +0.87% -0.26% +8.6045 +8.4615
Euro/Norway EURNOK= 10.2707 10.2459 +0.24% -1.88% +10.3041 +10.1883
Dollar/Sweden SEK= 8.4919 8.4217 +0.15% +3.61% +8.5023 +8.4105
Euro/Sweden EURSEK= 10.1701 10.1544 +0.15% +0.93% +10.1795 +10.1413
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World FX rates https://tmsnrt.rs/2RBWI5E
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(Editing by Nick Zieminski)