* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Kevin Buckland
TOKYO, March 5 (Reuters) - The dollar held firmly near
three-month highs on Friday after surging overnight as Federal
Reserve Chair Jerome Powell stuck with dovish rhetoric despite a
recent spike in bond market volatility.
The U.S. currency soared the most in a month after Powell
said the violent sell-off in Treasuries last week was "notable
and caught my attention" but was not "disorderly" or likely to
push long-term rates so high the Fed might have to intervene
more forcefully. Instead, he reiterated a commitment to maintain ultra-easy
monetary policy until the economy is "very far along the road to
recovery."
Powell's remarks reignited selling in Treasuries, with the
benchmark 10-year Treasury yield US10YT=RR jumping back above
1.5% and rising as high as 1.5830% in Asia. Last week, it had
soared to a three-month top of 1.614%. Riskier currencies including the Australian and New Zealand
dollars slid along with stocks as investor sentiment again
turned sour.
"Quite a night for market volatility, with the bond market
the centre of attention," Ray Attrill, head of forex strategy at
National Australia Bank in Sydney, wrote in a client note.
"The market was seemingly looking for Powell to push back
harder on the recent increase in yields."
The dollar index =USD was little changed at 91.660 early
in the Asian session after gaining 0.7% overnight.
The euro EUR=EBS slipped 0.1% to $1.19635, a one-month
low, following a 0.7% slump overnight.
The dollar eased slightly to 107.835 yen JPY=EBS , but
remained near the multi-month high at the cusp of 108 touched
during Thursday's 0.9% surge.
The safe-haven dollar has been supported both by the higher
Treasury yields themselves, and the upswing in risk aversion the
bond rout has fomented.
Impending U.S. fiscal stimulus is adding fuel to
expectations of higher inflation, as the accelerating rollout of
COVID vaccines heightens optimism for an economic recovery.
While many analysts expect commodity-linked currencies to
climb as economies reopen after the pandemic, they have been
hurt by the souring mood.
The Aussie AUD=D3 weakened 0.3% to $0.7705, extending
Thursday's 0.7% drop. The kiwi NZD=D3 fell 0.2%, adding to its
0.8% slide overnight.
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Currency bid prices at 106 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1956 $1.1973 -0.12% -2.13% +1.1977 +1.1956
Dollar/Yen JPY=D3 107.8850 107.9400 -0.06% +4.44% +107.9970 +107.8750
Euro/Yen EURJPY= 129.00 129.25 -0.19% +1.64% +129.3100 +129.0200
Dollar/Swiss CHF=EBS 0.9293 0.9288 +0.05% +5.04% +0.9296 +0.9288
Sterling/Dollar GBP=D3 1.3875 1.3897 -0.13% +1.59% +1.3895 +1.3879
Dollar/Canadian CAD=D3 1.2687 1.2667 +0.17% -0.35% +1.2687 +1.2661
Aussie/Dollar AUD=D3 0.7699 0.7721 -0.25% +0.11% +0.7726 +0.7701
NZ NZD=D3 0.7162 0.7186 -0.29% -0.22% +0.7192 +0.7165
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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