FOREX-Dollar hits 3-1/2 month high on firmer U.S. yields

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

(Updates currency moves, adds analyst quote, changes dateline
to New York)
By John McCrank and Saikat Chatterjee
NEW YORK, March 8 Reuters) - The U.S. dollar hit a 3-1/2
month high on Monday as elevated U.S. Treasury yields spooked
investors and boosted the greenback's safe-haven appeal.
After falling 4% in the last quarter of 2020, the dollar has
strengthened by nearly 2.5% year-to-date as investors expect the
broad rise in U.S. bond yields to weigh on stretched equity
valuations and boost demand for the U.S. currency.
"If we continue to see yields rise, that's going to be very
dollar positive and there's nothing really getting in the way,"
said Edward Moya, senior market analyst at OANDA in New York.
Recent economic figures were supportive with non-farm
payrolls surging by 379,000 jobs last month while the U.S.
Senate approved President Joe Biden's $1.9 trillion recovery
package.
"The U.S. labor market is healing quickly, President Biden's
gargantuan relief package has been approved by the Senate, and
America has stepped up its immunization game, administering a
record number of vaccines this weekend," said Marios
Hadjikyriacos, an investment analyst at XM.
U.S. Commerce Secretary Gina Raimondo on Monday rejected
calls for a weakening of the dollar, saying a strong dollar was
"good for America." But while U.S. yields climbed within striking distance of a
one-year high above 1.62% hit on Friday, German yields dipped
nearly 5 basis points last week, pulling the euro EUR=EBS to a
near four-month low below $1.19.
BofA analyst Athanasios Vamvakidis said the potent mix of
U.S. stimulus, faster reopening and greater consumer firepower
was a clear positive for the dollar.
The dollar index =USD stood at 92.21 against a basket of
six major currencies, up 0.35%, easing off of an intraday high
of 92.34, its highest level since Nov. 24. The Australian dollar AUD=D3 weakened 0.08% to $0.7674.
The New Zealand dollar NZD=D3 was down about 0.29%.
The currencies have been in demand because of their links to
global commodities trading, but the dollar's bounce dented both.
The dollar held near a one-month high against the British
pound, at $1.3819 GBP=D3 . Against the low-yielding yen
JPY=EBS, the greenback held firmer at 108.56 yen, having hit a
nine-month high of 108.645 on Friday.

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