FOREX-Dollar up from 2018 lows on economic hopes, euro profit-taking

* Control of both Houses gives Biden latitude to push agenda
* Yuan edges lower against the dollar
* Dollar outlook mixed
* Graphic: World FX rates in 2021 https://tmsnrt.rs/2RBWI5E

(Adds economic data, updates prices)
By Chuck Mikolajczak
NEW YORK, Jan 7 (Reuters) - The dollar bounced on Thursday from levels not touched since March 2018 to
its highest in a week as investors looked at the potential for an economic rebound in upcoming quarters
and investors who had been betting on the euro took profits.
The dollar index =USD , which measures the U.S. currency against a basket of peers, rose 0.53% at
89.785 after climbing as high as 89.979, with the euro EUR= down 0.43% to $1.2272.
The dollar had little movement on Wednesday as hundreds of President Donald Trump's supporters stormed
the U.S. Capitol in a bid to overturn his election defeat, battling police in the hallways and delaying
for hours the certification of Democratic President-elect Joe Biden's victory. Biden's victory has raised expectations for more fiscal stimulus measures to bolster the economic
outlook and lifted longer-dated bond yields, with the benchmark 10-year Treasury's yield US10YT=RR
climbing above 1% on Wednesday for the first time since March. On Thursday, the yield reached a high of
1.088%. "Once the rates start to move, as they did yesterday, it wasn't a big move but it was in the right
direction, that is the direction of the future," said Joseph Trevisani, senior analyst at FXStreet.com.
"It's debatable on how long it is going to take for the vaccines to work and hopefully end the
pandemic but once that happens, you are going to get a much stronger U.S. recovery and that will lead to a
stronger dollar."
Economic data on Thursday, however, underscored a stalling labor market, although a gauge of activity
in the services industry quickened in December.
Still, many analysts maintain a weaker long-term outlook for the dollar and see the recent advance as
the unwinding of bearish bets against the greenback, after it fell nearly 7% in 2020 and as much as 0.9%
in the new year.
The yuan edged lower at 6.47 per dollar CNH=EBS after Chinese authorities signaled a desire for a
slower pace of gains. The remarks by the State Administration of Foreign Exchange on Wednesday follow an advance of around
10% on the greenback since last May as China's economic rebound has led the world's pandemic recovery.
Sterling GBP= was last trading at $1.3568, down 0.29% on the day as it continued to slip below the
near three-year high of $1.3703 touched on Monday.
Bitcoin BTC=BTSP marked a fresh all-time high, topping $40,000 on Thursday, and was last up 6.24% at
$39,148.91. Currency bid prices at 2:58PM (1958 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 89.7850 89.3250 +0.53% +0.00% +89.9790 +89.2940
Euro/Dollar EUR=EBS $1.2272 $1.2328 -0.45% +0.45% +$1.2345 +$1.2245
Dollar/Yen JPY=D3 103.8200 103.0400 +0.74% +0.50% +103.9500 +103.1000
Euro/Yen EURJPY= 127.42 127.00 +0.33% +0.39% +127.4900 +126.9200
Dollar/Swiss CHF=EBS 0.8846 0.8781 +0.76% +0.00% +0.8861 +0.8778
Sterling/Dollar GBP=D3 $1.3569 $1.3610 -0.29% -0.67% +$1.3632 +$1.3533
Dollar/Canadian CAD=D3 1.2685 1.2680 +0.06% -0.37% +1.2733 +1.2665
Aussie/Dollar AUD=D3 $0.7759 $0.7806 -0.58% +0.88% +$0.7817 +$0.7726
Euro/Swiss EURCHF= 1.0856 1.0826 +0.28% +0.45% +1.0862 +1.0826
Euro/Sterling EURGBP= 0.9042 0.9055 -0.14% +1.17% +0.9077 +0.9016
NZ NZD=D3 $0.7258 $0.7295 -0.49% +1.09% +$0.7304 +$0.7226
Dollar/Dollar
Dollar/Norway NOK=D3 8.4300 8.4165 +0.21% -1.78% +8.4715 +8.4065
Euro/Norway EURNOK= 10.3485 10.3680 -0.19% -1.13% +10.3785 +10.3325
Dollar/Sweden SEK= 8.1906 8.1645 -0.04% -0.07% +8.2319 +8.1577
Euro/Sweden EURSEK= 10.0522 10.0565 -0.04% -0.24% +10.0905 +10.0504