* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Feb 23 (Reuters) - The dollar nursed losses near
a six-week low on Tuesday while commodity currencies loitered
around multi-year highs, as investors' focus shifted to how U.S.
Federal Reserve chief Jerome Powell might respond to resurgent
inflation expectations.
Surging prices for materials from oil and copper to lumber
and milk powder have pushed currencies such as the Australian
and New Zealand dollars to their highest in nearly three years.
However the gains have come with a worldwide rise in
inflation expectations and a big sell-off in longer-dated bonds.
Traders expect Powell, who testifies before Congress at 1500
GMT, to provide some reassurance that the Fed will tolerate
higher inflation without immediately hiking rates, which they
said could calm bond markets and eventually weigh on the dollar.
"I think he will talk up the downside," said Commonwealth
Bank of Australia currency analyst Joe Capurso in Sydney.
"If anything, I think he will give markets a bit of a cold
shower and say: 'Mr Market you're getting a bit ahead of
yourself. There are plenty of risks...and the U.S. economy is
long, long way from full employment.'"
Morning moves were slight ahead of his appearance, but
renewed confidence that low U.S. interest rates will not lift
anytime soon can likely clear the way for further gains in
trade-exposed currencies at the dollar's expense.
The U.S. dollar index =USD sat at 90.019 on Tuesday, just
above its lowest since mid January. The Australian dollar
AUD=D3 last bought $0.7913 and the kiwi NZD=D3 $0.7323, with
both trading broadly steady early in the Asia session.
The euro EUR=EBS made a small gain to $1.2165 and is
poised to re-test resistance around $1.2220.
Sterling GBP=D3 , which has rallied nearly 3% this year as
a speedy vaccine rollout has inspired confidence in the prospect
of a British economic rebound, held above $1.40 at $1.4067.
The Japanese yen JPY= , which has been the worst performing
major currency of 2021 because it is sensitive to tumbling U.S.
Treasury prices, steadied at 105.02 per dollar.
Elsewhere bitcoin steadied above $50,000 after a wild
overnight ride where it traded in a $10,000 range and dropped as
low as $47,400. Currency bid prices at 0044 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2165 $1.2158 +0.06% -0.43% +1.2167 +1.2160
Dollar/Yen JPY=D3 104.9800 105.0700 -0.01% +1.71% +105.0650 +105.0550
Euro/Yen EURJPY= 127.72 127.72 +0.00% +0.63% +127.7700 +127.6700
Dollar/Swiss CHF=EBS 0.8956 0.8962 -0.04% +1.25% +0.8960 +0.8958
Sterling/Dollar GBP=D3 1.4070 1.4064 +0.02% +2.96% +1.4075 +1.4064
Dollar/Canadian CAD=D3 1.2605 1.2619 -0.06% -0.96% +1.2617 +1.2609
Aussie/Dollar AUD=D3 0.7916 0.7916 +0.00% +2.91% +0.7921 +0.7912
NZ NZD=D3 0.7327 0.7329 -0.05% +2.01% +0.7331 +0.7323
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX
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