* Janet Yellen to testify before Senate on Tuesday
* Safe-haven currencies weaken as Asian stocks rebound
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Kevin Buckland
TOKYO, Jan 19 (Reuters) - The dollar slipped from close to
its highest in nearly one month on Tuesday as caution set in
before U.S. Treasury Secretary nominee Janet Yellen testifies
later, with traders keeping a close eye on the policies of the
incoming Joe Biden government.
The greenback weakened against most major peers as stocks in
Asia rallied, lifting risk sentiment and curbing demand for
safe-haven currencies like the dollar and Japanese yen.
The dollar index =USD slipped about 0.1% to 90.708 in the
Asian session, a day before U.S. President-elect Joe Biden is
set to be inaugurated.
On Monday, the gauge ended 0.1% lower after earlier climbing
to 90.94 for the first time since Dec. 21, as the Wall Street
Journal reported Yellen will affirm a more traditional
commitment to market-set currency rates in a Senate testimony on
Tuesday. That's in stark contrast to outgoing President Donald Trump,
who often railed against dollar strength.
The greenback has started the year with a near 2% rally
against major peers, supported by a rise U.S. Treasury yields in
response to Biden's plan for a $1.9 trillion pandemic relief
package.
The dollar fell close to 7% last year on expectations U.S.
monetary policy would stay ultra-loose and amid hopes for a
post-pandemic global recovery.
Many analysts expect the dollar to resume its march lower
this year.
"We've seen comments from Janet Yellen that she won't be
pursuing a weak dollar policy per se, but that doesn't mean that
the overall impact of Fed policy won't keep the dollar
weakening," said Michael McCarthy, chief strategist at broker
CMC Markets in Sydney.
"I suspect what we've been seeing in the dollar at the
moment is a minor corrective rally in an overall downtrend."
The greenback has also been supported recently by an
unwinding of bearish bets, with data showing that hedge funds
piled up the biggest net short position since May 2011 in the
week ended Jan. 12. Such large positions suggest that traders
would be relatively more inclined to reduce their positions than
add to already big bets.
The euro rose 0.2% to $1.2095 EUR=EBS , after dipping to
$1.2054 for the first time since Dec. 2 on Monday, in subdued
trading with U.S. markets closed for Martin Luther King Jr. Day.
The riskier Aussie dollar AUD= rose 0.3% to 77.082 U.S.
cents, reversing a decline of more than 0.2% overnight.
The dollar gained 0.3% to 104.05 yen JPY=EBS , although
still consolidating in a narrow range after reaching a one-month
high of 104.40 last week.
========================================================
Currency bid prices at 12:39PM (339 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2095 $1.2077 +0.16% -1.00% +1.2098 +1.2075
Dollar/Yen JPY=D3 104.0150 103.6550 +0.39% +0.75% +104.0700 +103.6800
Euro/Yen EURJPY= 125.81 125.22 +0.47% -0.87% +125.8600 +125.2100
Dollar/Swiss CHF=EBS 0.8906 0.8913 -0.07% +0.67% +0.8911 +0.8902
Sterling/Dollar GBP=D3 1.3601 1.3588 +0.11% -0.43% +1.3613 +1.3581
Dollar/Canadian CAD=D3 1.2722 1.2754 -0.24% -0.08% +1.2753 +1.2721
Aussie/Dollar AUD=D3 0.7713 0.7685 +0.38% +0.28% +0.7718 +0.7675
NZ NZD=D3 0.7134 0.7113 +0.38% -0.57% +0.7139 +0.7107
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates https://tmsnrt.rs/2RBWI5E
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>