FOREX-Dollar stands tall as U.S. yields resume climb

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

By Saikat Chatterjee
LONDON, March 8 Reuters) - The U.S. dollar gained on
Monday, climbing towards a 3-1/2-month high, as a broad rise in
Treasury yields spooked investor sentiment in stock markets.
Having fallen 4% in the last quarter of 2020, the dollar has
strengthened more than 2.4% year-to-date against rivals as
investors expect the broad rise in U.S. bond yields to weigh on
stretched equity valuations and boost the greenback's appeal.
"Rising U.S. yields have added to equity market volatility
and supported the US dollar," UBS strategists said in a daily
note. "The Federal Reserve remains dovish, but chair Jerome
Powell chose not to push back verbally against higher yields
providing a further short-term boost to the greenback."
Yield trends have diverged across major markets.
While U.S. yields increased a hefty 10 basis points last
week, German yields dipped nearly 5 basis points, pulling the
euro EUR=EBS to a near four-month low below the $1.19 level.
BofA analyst Athanasios Vamvakidis argued the potent mix of
U.S. stimulus, faster reopening and greater consumer firepower
was a clear positive for the dollar.
The Senate passed a $1.9 trillion COVID-19 relief plan, a
day after a stunning U.S. jobs report sent the greenback to its
highest level since November 2020.
The dollar index =USD stood at 92.186 against a basket of
six major currencies, up 0.3% and just shy of a late-November
high of 92.201 set on Friday. The Australian dollar AUD=D3 rose 0.2% to $0.7696, but was
well off its session high of $0.77230. The New Zealand dollar
NZD=D3 was down about 0.1% after earlier rising 0.4% to
$0.719.
The antipodean currencies have been in demand because of
their links to the global commodities trade.
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 steady at 108.46 yen, having hit a
nine-month high of 108.645 on Friday.

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