* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Karen Brettell
NEW YORK, March 4, (Reuters) - The dollar pared earlier
gains on Thursday before an appearance by Federal Reserve
Chairman Jerome Powell that will be watched for any sign the Fed
is uncomfortable with U.S. Treasury yield increases.
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.
The dollar index =USD was little changed on the day at
91.094, after earlier rising to 91.223. The euro EUR=EBS
dipped 0.19% to $1.2039.
Investors want to see whether Powell expresses concern about
a recent sell-off in Treasuries and if there is any change in
his assessment of the economy before the Fed's next meeting,
ending March 17.
Benchmark 10-year Treasury yields US10YT=RR were last
1.47% after earlier rising as high as 1.49%.
"Comments that he (Powell) is monitoring events in the
Treasury market might be enough to calm things down, encourage a
return to high-yield FX and a softer dollar, but no such concern
would suggest the Fed is happy for U.S. Treasury yields to ‘find
the right level' … potentially triggering another spike in U.S.
yields and more dollar short-covering," ING said in a note to
clients.
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 laggers in that environment under a
higher U.S. yield backdrop," said TD's Issa.
The franc CHF=D3 weakened as far as 0.9253, the lowest
since Sept. 28. The yen JPY=D3 reached 107.48, its weakest
since July 20.
Higher risk currencies, including the Australian dollar, by
contrast, are positioned to outperform. The Aussie AUD=D3 was
last up 0.22% on the day at $0.7792, holding below three-year
highs of $0.8007 reached last week.
In the cryptocurrency market, bitcoin BTC=BTSP fell 1.23%
to $49,775. Ether ETH=BTSP gained 1.06% to $1,583.
Bitcoin has surged 78% so far this year as it gains more
acceptance in the financial services industry, but the U.S.
financial regulator is likely to start working on guidelines for
digital assets, which could increase scrutiny of
cryptocurrencies. Currency bid prices at 9:42AM (1442 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 91.0940 91.0970 +0.01% 1.237% +91.2230 +90.9700
Euro/Dollar EUR=EBS $1.2039 $1.2062 -0.19% -1.46% +$1.2065 +$1.2026
Dollar/Yen JPY=D3 107.3850 106.9600 +0.45% +4.02% +107.4850 +106.9900
Euro/Yen EURJPY= 129.29 129.08 +0.16% +1.86% +129.3800 +128.9200
Dollar/Swiss CHF=EBS 0.9242 0.9200 +0.44% +4.45% +0.9253 +0.9190
Sterling/Dollar GBP=D3 $1.3979 $1.3950 +0.22% +2.33% +$1.3980 +$1.3920
Dollar/Canadian CAD=D3 1.2627 1.2656 -0.22% -0.83% +1.2674 +1.2617
Aussie/Dollar AUD=D3 $0.7792 $0.7775 +0.22% +1.29% +$0.7814 +$0.7753
Euro/Swiss EURCHF= 1.1127 1.1094 +0.30% +2.96% +1.1141 +1.1077
Euro/Sterling EURGBP= 0.8612 0.8642 -0.35% -3.64% +0.8655 +0.8611
NZ NZD=D3 $0.7251 $0.7246 +0.11% +1.02% +$0.7272 +$0.7227
Dollar/Dollar
Dollar/Norway NOK=D3 8.4835 8.4915 -0.03% -1.14% +8.5485 +8.4840
Euro/Norway EURNOK= 10.2155 10.2459 -0.30% -2.40% +10.2879 +10.2143
Dollar/Sweden SEK= 8.4319 8.4217 -0.02% +2.87% +8.4555 +8.4105
Euro/Sweden EURSEK= 10.1520 10.1544 -0.02% +0.75% +10.1755 +10.1500
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World FX rates https://tmsnrt.rs/2RBWI5E
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