* Dollar weakens vs most currencies
* Yellen to testify at Senate Finance Committee
* Euro, Aussie dollar gain
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Adds new comment, FX table, updates prices, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 19 (Reuters) - The dollar dropped for a second straight session on Tuesday, with broader
risk appetite turning more positive, as investors prepared for U.S. Treasury Secretary nominee Janet
Yellen to talk up the need for major fiscal stimulus and commit to a market-determined exchange rate.
The dollar's fall came after a 2% rise so far in 2021, a gain which caught off guard many investors
who had bet on a further decline following its weakness in 2020.
The dollar has been helped in January by rising U.S. Treasury yields and some investor caution about
the strength of the global economic recovery from the coronavirus pandemic. But most analysts are sticking
with their calls for a weaker dollar from here.
Yellen is expected to appear before the Senate Finance Committee later on Tuesday.
"Investors were clearly upbeat about the prospect of President-elect (Joe) Biden's $1.9 trillion
dollar stimulus proposal," said Boris Schlossberg, managing director, at BK Asset Management in New York.
He expects Yellen, who returns to government as Treasury Secretary after a stint as Federal Reserve
chair, to have a very smooth confirmation hearing in which "she is likely to encourage lawmakers to pass
the proposed package given the low level of interest rates."
The Wall Street Journal on Monday reported Yellen will affirm a more conventional commitment to
market-set currency rates in her Senate testimony on Tuesday. That contrasts with outgoing President Donald Trump, who often railed against dollar strength.
The dollar index, which measures the currency against a basket of other currencies, dropped 0.3% to
90.481 =USD , but it was still above its more than two-and-a-half-year low of 89.206 touched at the start
of this month.
With the dollar weakening, the euro gained, rising 0.5% to $1.2134 EUR=EBS .
The single currency was unaffected by Italian Prime Minister Giuseppe Conte's facing a confidence vote
to stay in office. The result of the vote is due after 1800 GMT.
More volatile and commodity-linked currencies, such as the Australian dollar, also benefited from the
weaker U.S. currency, with the Aussie up 0.4% at $0.7712 AUD=D3 .
Rising commodity prices in recent months have boosted currencies of countries with large commodity
exports, such as Australia and Canada.
"We continue to see scope for further gains in commodity-related currencies in the year ahead, which
should benefit as well from the strengthening global recovery once vaccines are rolled out more widely,"
said Lee Hardman, an analyst at MUFG.
Sterling rose 0.2% against the dollar to $1.3610 GBP=D3 .
The dollar rose 0.2% against the yen to 103.93 yen JPY=EBS , although still consolidating in a narrow
range after reaching a one-month high of 104.40 last week.
Emerging-market currencies were mostly higher but were some way off recent highs.
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Currency bid prices at 9:44AM (1444 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 90.4780 90.7680 -0.31% +0.00% +90.7680 +90.4010
Euro/Dollar EUR=EBS $1.2134 $1.2077 +0.48% -0.69% +$1.2145 +$1.2075
Dollar/Yen JPY=D3 103.9600 103.6550 +0.26% +0.62% +104.0800 +103.6800
Euro/Yen EURJPY= 126.15 125.22 +0.74% -0.62% +126.2100 +125.2100
Dollar/Swiss CHF=EBS 0.8877 0.8913 -0.39% +0.35% +0.8916 +0.8865
Sterling/Dollar GBP=D3 $1.3612 $1.3588 +0.18% -0.37% +$1.3625 +$1.3581
Dollar/Canadian CAD=D3 1.2747 1.2754 -0.05% +0.11% +1.2754 +1.2720
Aussie/Dollar AUD=D3 $0.7711 $0.7685 +0.36% +0.25% +$0.7725 +$0.7675
Euro/Swiss EURCHF= 1.0772 1.0755 +0.16% -0.34% +1.0781 +1.0757
Euro/Sterling EURGBP= 0.8913 0.8886 +0.30% -0.27% +0.8918 +0.8884
NZ NZD=D3 $0.7118 $0.7113 +0.10% -0.85% +$0.7140 +$0.7107
Dollar/Dollar
Dollar/Norway NOK=D3 8.5305 8.5895 -0.63% -0.61% +8.5940 +8.5200
Euro/Norway EURNOK= 10.3530 10.3695 -0.16% -1.09% +10.3890 +10.3340
Dollar/Sweden SEK= 8.3351 8.3703 -0.22% +1.69% +8.4053 +8.3140
Euro/Sweden EURSEK= 10.1142 10.1360 -0.22% +0.38% +10.1497 +10.0890
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World FX rates https://tmsnrt.rs/2RBWI5E
U.S. dollar index https://tmsnrt.rs/38WDnqX
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