* Sterling near three-year high on vaccine progress
* Yuan heads toward 6.4/dollar barrier
* Yen languishes as investors seek riskier bets
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Feb 16 (Reuters) - The U.S. dollar was pinned
down on Tuesday, as vaccine optimism boosted the British pound
to an almost three-year high, while rising oil prices and
buoyant expectations for global recovery supported commodity and
trade-exposed currencies.
In trade thinned by Lunar New Year holidays in China and
Monday's U.S. holiday, the positive mood also weighed on the
safe-haven yen which made a one-week low on the dollar overnight
and fell to more than two-year lows on the euro and the Aussie.
The U.S. dollar index =USD , which measures the dollar
against a basket of six major currencies, sat at 90.351, not far
above a two-week low it struck last Wednesday.
The Chinese yuan CNH=D3 , a favoured vehicle for playing
the dollar's weakness in Asia, was on the brink of strengthening
past 6.4 per dollar for the first time since mid-2018 and last
stood at 6.4033 in offshore trade.
The risk-sensitive Australian dollar AUD=D3 held near
Monday's one-month high at $0.7785.
"The dollar tends to underperform when you see this broad
positive sentiment in markets," said Rodrigo Catril, senior
currency strategist at National Australia Bank in Sydney.
"There are also inflationary pressures particularly coming
from energy prices," he said, which is pushing up nominal yields
- adding another weight on the yen as that can attract flows
from Japan - but keeping real returns on Treasuries steady.
Bitcoin BTC=BTSP hovered just short of $50,000 as profit
taking paused the cryptocurrency's steep rally that has carried
it more than 60% higher in 2021 so far. The yield on benchmark ten-year U.S. Treasuries US10YT=RR
leapt five basis points to 1.2501% in early Asia trade on
Monday, while most major currencies were steady. MKTS/GLOB
Sterling GBP= , which broke past $1.39 for the first time
in almost three years on Monday, held at $1.3912. It also held
steady at 87.15 pence per euro EURGBP= , its highest since May
2020.
Sterling has gained as much as 2.5% on the dollar in less
than two weeks as the aggressive rollout of Britain's COVID-19
vaccination programme has raised expectations its economy will
be able to recover more swiftly than European peers'. GBP/
The euro EUR=EBS was steady at $1.2132 on Tuesday while
the yen JPY=EBS , which has dropped 2% so far this year, nursed
losses at 105.36 per dollar. The yen also hit its lowest since
late 2018 against the euro EURJPY= and the Australian dollar
AUDJPY= and hit a three-year low on the Swiss franc CHFJPY= .
"The yen has been the worst performing currency of 2021,
with its negative correlation to U.S. Treasury yields proving to
be the biggest dampening factor," said Francesco Pesole,
currency strategist at Dutch bank ING in a note to clients.
"When adding weak safe-haven demand as the global recovery
gathers pace, some additional trimming of yen net long positions
may be on the cards."
Ahead on Tuesday, investors are looking to eurozone growth
estimates, a German sentiment survey and U.S. manufacturing data
to gauge the relative pace of the world's pandemic recovery.
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Currency bid prices at 8:26AM in Singapore (0026 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2138 $1.2125 +0.11% -0.65% +1.2138 +1.2125
Dollar/Yen JPY=D3 105.4200 105.3000 +0.00% +1.95% +105.4400 +0.0000
Euro/Yen EURJPY= 127.97 127.78 +0.15% +0.83% +127.9700 +127.7500
Dollar/Swiss CHF=EBS 0.8895 0.8901 -0.04% +0.57% +0.8901 +0.8897
Sterling/Dollar GBP=D3 1.3920 1.3908 +0.09% +1.89% +1.3921 +1.3904
Dollar/Canadian CAD=D3 1.2626 1.2644 -0.13% -0.84% +1.2640 +1.2627
Aussie/Dollar AUD=D3 0.7790 0.7780 +0.13% +1.27% +0.7791 +0.7779
NZ NZD=D3 0.7239 0.7228 +0.17% +0.82% +0.7239 +0.7229
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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