* Dollar index hits four-month high
* Dollar/yen climbs to one-year peak
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Adds new comment, updates prices, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, March 30 (Reuters) - The dollar rose against major currencies on Tuesday and climbed to a
one-year high against the yen as increasing U.S. vaccinations and plans for a major stimulus package stoked
inflation expectations and lifted U.S. Treasury yields.
Benchmark 10-year Treasury yields rose to 14-month highs on Tuesday at 1.776%, and were last up 2 basis
points on the day at 1.742%.
Treasury yields are rising a day before President Joe Biden is set to outline how he intends to pay for
a $3 trillion to $4 trillion infrastructure plan. "The acceleration of the vaccine rollout and the size of the infrastructure plan are causing yields to
rise and the dollar is benefiting," said John Doyle, vice president of dealing and trading at Tempus Inc. in
Washington.
The safe-haven dollar found support across the board as investors also digested the fallout from the
collapse of highly leveraged investment fund Archegos Capital. The dollar index rose above the 93 mark and was last up 0.4%at 93.288. It hit a high of 93.357 =USD ,
its highest level in four months.
The dollar also rose above 110 yen, a level not seen since March last year, and was last up 0.5% on the
day at 110.375 yen JPY=EBS . The greenback was on track for its best month since late 2016.
Analysts said the yen was also vulnerable to higher inflation expectations in the United States than in
Japan and a rise in long-term U.S. yields. The dollar/yen pair typically has a positive correlation with
long-term U.S. yields.
The euro, meanwhile, weakened on the day to $1.1711, its lowest level since early November. It was last
down 0.3% to $1.1728 EUR=EBS .
Tougher coronavirus curbs in France and Germany have dimmed the short-term outlook for the European
economy. A widening spread between U.S. and German bond yields is adding pressure on the euro.
The spread between U.S. and German 10-year yields has widened the most since January of last year.
Investors will watch closely the monthly U.S. non-farm payrolls on Friday, with Federal Reserve
policymakers so far citing slack in the labor market for their continued lower-for-longer stance on interest
rates.
"In a week when the market is feeling so optimistic about the forthcoming payrolls release, it seems
very likely that the greenback will find strong support," Rabobank currency strategist Jane Foley wrote in a
report.
However, "the market is in danger of pricing in too much inflation risk," meaning "we see scope for the
USD to soften in the months ahead," the report said.
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Currency bid prices at 10:41AM (1441 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 93.2340 92.9030 +0.37% 3.615% +93.3570 +92.8820
Euro/Dollar EUR=EBS $1.1727 $1.1767 -0.34% -4.02% +$1.1778 +$1.1711
Dollar/Yen JPY=EBS 110.3300 109.8350 +0.46% +6.79% +110.4200 +109.7500
Euro/Yen EURJPY= 129.38 129.20 +0.14% +1.94% +129.5400 +129.1800
Dollar/Swiss CHF=EBS 0.9432 0.9394 +0.41% +6.61% +0.9438 +0.9389
Sterling/Dollar GBP=D3 $1.3727 $1.3760 -0.20% +0.52% +$1.3783 +$1.3707
Dollar/Canadian CAD=D3 1.2625 1.2590 +0.29% -0.84% +1.2647 +1.2581
Aussie/Dollar AUD=D3 $0.7616 $0.7632 -0.23% -1.01% +$0.7664 +$0.7601
Euro/Swiss EURCHF= 1.1058 1.1051 +0.06% +2.32% +1.1067 +1.1045
Euro/Sterling EURGBP= 0.8541 0.8542 -0.01% -4.43% +0.8554 +0.8524
NZ NZD=D3 $0.6987 $0.7001 -0.19% -2.69% +$0.7033 +$0.6975
Dollar/Dollar
Dollar/Norway NOK=D3 8.5500 8.5485 +0.01% -0.44% +8.5890 +8.5460
Euro/Norway EURNOK= 10.0292 10.0426 -0.13% -4.18% +10.0795 +10.0247
Dollar/Sweden SEK= 8.7486 8.6906 +0.26% +6.74% +8.7638 +8.6832
Euro/Sweden EURSEK= 10.2597 10.2328 +0.26% +1.82% +10.2695 +10.2194
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