* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Kevin Buckland
TOKYO, April 12 (Reuters) - The dollar languished near
2-1/2-week lows against major peers on Monday as a decline in
Treasury yields restrained the U.S. currency.
Both the greenback and bond yields are taking something of a
breather after scaling multi-month peaks at the end of last
month, powered by bets that an accelerating U.S. recovery from
the pandemic will lift inflation faster than Federal Reserve
policymakers anticipate.
While the Fed's repeated insistence that near-term price
pressures will prove transitory has somewhat soothed investors,
the dollar firmed on Friday following stronger-than-expected
producer price data, taking the edge off the currency's worst
week this year.
The dollar index =USD , which tracks the greenback against
a basket of six rivals, was little changed at 92.193 early in
the Asian session, following a 0.9% slump last week. It dipped
below 92 on Thursday for the first time since March 23.
The benchmark 10-year Treasury yield US10YT=RR was at
1.6745% after dropping as low as 1.6170% last week. It had
surged to a more than one-year high of 1.7760% on March 30.
"Key for the near-term outlook will be whether yields
continue to consolidate around these levels, or march higher,"
which would support the dollar, National Australia Bank
strategist Tapas Strickland wrote in a client note.
"The broader thematic of a rapid rebound in the U.S. economy
on the back of an impressive vaccine rollout continues."
Data on Friday showed the largest annual gain in 9-1/2 years
for U.S. producer prices, backing expectations for higher
inflation as the economy reopens amid an improved public health
environment and massive government funding. U.S. consumer price data will be released Tuesday.
Fed Chair Jerome Powell speaks on Wednesday at the Economic
Club of Washington. In an interview on Sunday on CBS's "60
Minutes," Powell said the U.S. economy is at an "inflection
point" with expectations that growth and hiring will pick up
speed in the months ahead, but he also warned of risks stemming
from a hasty reopening. Against the euro EUR= , the dollar hovered near the lowest
since March 23 at $1.1901. It bought 109.66 yen JPY= , close to
a two-week low below 109 reached on Thursday.
"USD has some upside potential this week," Commonwealth Bank
of Australia strategist Kimberley Mundy wrote in a report.
"Strong U.S. economic data will highlight the divergence
between the U.S.'s fast economic recovery and the more stunted
recoveries in other developed economies."
The dollar can lift back toward 110 yen, while the euro has
scope to retrace most of that recent gains from its almost
five-month low near $1.17, she said.
In cryptocurrencies, bitcoin BTC=BTSP traded near $60,000
after rising as high as $61,222.22 over the weekend, closing the
gap to the record peak of $61,781.83 set one month ago.
Currency bid prices at 050 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1901 $1.1901 +0.00% -2.59% +1.1911 +1.1887
Dollar/Yen JPY=D3 109.6950 109.6300 +0.07% +6.22% +109.7420 +109.6900
Euro/Yen EURJPY= 130.55 130.47 +0.06% +2.86% +130.6100 +130.4100
Dollar/Swiss CHF=EBS 0.9252 0.9246 +0.07% +4.58% +0.9257 +0.9253
Sterling/Dollar GBP=D3 1.3707 1.3706 +0.05% +0.37% +1.3712 +1.3705
Dollar/Canadian CAD=D3 1.2532 1.2525 +0.07% -1.57% +1.2538 +1.2528
Aussie/Dollar AUD=D3 0.7616 0.7618 +0.00% -0.97% +0.7627 +0.7612
NZ NZD=D3 0.7031 0.7030 +0.04% -2.06% +0.7042 +0.7030
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX
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World FX rates https://tmsnrt.rs/2RBWI5E
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