* U.S. 10-year Treasury rises past 1.70% to new 13-month
high
* Sterling slips as BoE says recovery outlook still unclear
(New throughout, updates prices, market activity, comments to
U.S. market open; changes dateline, previous LONDON)
By Saqib Iqbal Ahmed and Ritvik Carvalho
NEW YORK, March 18 (Reuters) - The U.S. dollar rallied
across the board on Thursday, as higher Treasury yields helped
it recoup nearly all its losses from the previous session
following the Federal Reserve's pushback against speculation
over interest rate hikes.
The U.S. Dollar Currency Index =USD was 0.48% higher at
91.809, after falling 0.56% to a two-week low of 91.30 earlier
in the session.
The U.S. economy is heading for its strongest growth in
nearly 40 years, even as central bank policymakers are pledging
to keep their foot on the gas despite an expected surge of
inflation, the Federal Reserve said on Wednesday.
While inflation is expected to jump to 2.4% this year, above
the central bank's 2% target, Federal Reserve Chair Jerome
Powell said that is viewed as a temporary surge that will not
change the Fed's pledge to keep its benchmark overnight interest
rate near zero.
"The USD reacted as you would expect as the reflation trade
resurfaced with gusto shortly after the press conference," Brad
Bechtel, global head of FX at Jefferies, said in a note.
"This morning the USD is recouping some of those losses,"
Bechtel said.
Following the Fed's statement, the benchmark 10-year yield
US10YT=RR retreated from a 13-month high of 1.69% hit early on
Wednesday. On Thursday, yield on the 10 year bond resumed its
recent rally to hit a fresh 13-month high of 1.7383%.
AUD=D3 NZD=D3
The dollar added to early gains after data on Thursday
showed the number of Americans filing new claims for
unemployment benefits unexpectedly rose last week. Against the yen, the dollar gained 0.27% to 109.135 yen
JPY=EBS .
A Nikkei report said the Bank of Japan (BOJ) was expected to
slightly widen an implicit band in which it allows long-term
interest rates to move around its 0% target. Elsewhere, Norway's crown reached its strongest against the
euro in 13 months - 10.0223 crowns per euro - before erasing
gains after Norway's central bank left its key interest rate
unchanged at a record-low 0.0% on Thursday and shifted its
forward guidance to signal that a rate increase may follow in
the second half of this year. Sterling fell against the dollar as the Bank of England
warned the outlook for Britain's recovery remained unclear,
dampening some speculation the bank would signal a more
confident outlook. GBP=D3 Bitcoin BTC=BTSP slipped 2.09% to $57,668.42.
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Playing catch-up https://tmsnrt.rs/3qXXHhg
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