* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
* Treasury market regains calm, yields support dollar
* Safe-harbour yen and Swiss franc fall against greenback
* Powell comments could set the tone for global markets
By Stanley White
TOKYO, March 4 (Reuters) - The dollar hit a seven-month high
against the yen on Thursday as an orderly rise in U.S. Treasury
yields lent support ahead of a speech by Federal Reserve
Chairman Jerome Powell that may determine the trend for global
bond markets and currencies.
The dollar also traded near a three-month high against the
Swiss franc and held on to gains against most currencies as a
renewed sense of calm in the Treasury market supported
sentiment.
However, currencies were subdued overall as traders avoided
taking out big positions before the speech later in the day.
Investors are anxious to see if Powell expresses concern
about a recent volatile 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.
The dollar may continue to rise against the yen as long as
Treasury yields rise at a measured pace, but the greenback is
likely to fall against currencies of major commodities exporters
as more signs point to a rebound in the global economy.
"The performance of the dollar will vary depending on the
currency," said Masafumi Yamamoto, chief currency strategist at
Mizuho Securities.
"Dollar/yen looks well bid because of yields and because
Japan's economy is underperforming relative to the United
States, but as long as commodity prices rise, the dollar will
weaken against commodity currencies."
The dollar rose to 107.09 yen JPY=D3 , the highest since
July last year.
The U.S. currency bought 0.9195 Swiss franc CHF=EBS , close
to the highest since November.
The British pound GBP=D3 eased slightly to $1.3940, while
the euro EUR=D3 traded at $1.2060, nursing a 0.24% loss from
the previous session.
The benchmark 10-year Treasury yield US10YT=RR edged up to
1.4825% in Asian trading.
A chaotic sell-off in Treasuries from the start of the year
on concerns that massive government spending to support the
global economy may drive up inflation culminated in 10-year
yields rising to a one-year high of 1.6140% last week.
The move was so rapid that global stock markets fell and the
dollar swooned against most currencies, but the greenback has
since regained its composure as disorderly selling of Treasuries
seems to have run its course, for now at least.
The dollar index USD= stood at 91.009 against a basket of
six major currencies, holding on to a 0.32% gain from Wednesday.
The Australian dollar AUD=D3 , which is often traded as a
proxy for global growth because it is closely tied to
commodities, recovered from early losses and rose to $0.7788.
The New Zealand dollar NZD=D3 , another closely watched
commodity currency, also firmed slightly.
Traders said the Aussie and the kiwi are likely to continue
rising because both economies are rebounding strongly from the
COVID-19 pandemic and they will both benefit from an
acceleration in global trade.
In the cryptocurrency market, bitcoin BTC=BTSP rose 2.38%
to $51,593, while rival digital currency ether ETH=BTSP added
3.31% to $1,621.
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 0201 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2060 $1.2062 -0.01% -1.29% +1.2065 +1.2044
Dollar/Yen JPY=D3 107.0250 106.9600 +0.03% +3.58% +107.0900 +106.9900
Euro/Yen EURJPY= 129.08 129.08 +0.00% +1.70% +129.1300 +128.9800
Dollar/Swiss CHF=EBS 0.9195 0.9200 -0.06% +3.93% +0.9200 +0.9193
Sterling/Dollar GBP=D3 1.3940 1.3950 -0.06% +2.04% +1.3952 +1.3920
Dollar/Canadian CAD=D3 1.2652 1.2656 +0.00% -0.61% +1.2674 +1.2654
Aussie/Dollar AUD=D3 0.7788 0.7775 +0.17% +1.24% +0.7788 +0.7753
NZ NZD=D3 0.7256 0.7246 +0.14% +1.04% +0.7256 +0.7227
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX
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