FOREX-Dollar perched at 3-1/2 month highs on firmer U.S. yields

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

By Saikat Chatterjee
LONDON, March 8 Reuters) - The U.S. dollar hit a 3-1/2
month high on Monday as rising 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.
Recent economic figures are also supportive with U.S. data
showing non-farm payrolls surged by 379,000 jobs last month
while the U.S. Senate approved President Joe Biden's $1.9
trillion recovery package.
"The U.S. labour 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," Marios
Hadjikyriacos, an investment analyst at XM, said.
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 92.30 against a basket of
six major currencies, up 0.4%, its highest level since
late-November. The Australian dollar AUD=D3 weakened 0.3% to $0.7658. The
New Zealand dollar NZD=D3 was down about 0.8%.
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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USD positions https://tmsnrt.rs/2PNeqHz
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