* Aussie, kiwi make three-year peaks
* Sterling gains as lockdown finish-line comes in to view
* Rising U.S. yields drag on Japanese yen
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Stanley White and Tom Westbrook
TOKYO/SINGAPORE, Feb 22 (Reuters) - The U.S. dollar was sold
to multi-year lows against sterling and the Australian and New
Zealand currencies on Monday, as investors cheered vaccine
progress and wagered on the pandemic recovery bringing a global
trade boom and an export windfall.
The British pound GBP=D3 hit $1.4043, its highest since
April 2018, as Prime Minister Boris Johnson charts a path out of
lockdowns on the back of rapid vaccinations. The Aussie AUD=D3 rose as much as 0.5% to an almost
three-year high of $0.7908 and the kiwi NZD=D3 hit $0.7338,
also its best since early 2018, helped by S&P's upgrade of New
Zealand's sovereign credit ratings by a notch. The euro EUR=EBS was steady at $1.2119, while the yen
JPY=EBS was the only major to cede ground to the greenback as
rising U.S. Treasury yields drew investment flows from Japan.
Benchmark 10-year Treasury yields US10YT=RR rose to
1.3940%, their highest since Feb. 2020 and the dollar was up
0.2% to buy 105.73 yen.
With local yields anchored by the Bank of Japan, the yen
remains particularly sensitive to the U.S. bond market, and has
dropped 2% this year while U.S. ten-year yields have climbed
nearly 50 basis points. US/
Sovereign yields elsewhere in Asia have gained in tandem, or
in the case of Australia and New Zealand far in excess of U.S.
rates, leaving little or no relative benefit for the dollar, as
investors begin to price in a pickup in global inflation.
"There's a tide of higher rates across the board, and
whether the U.S. does an extra five basis points than Germany is
neither here nor there," said Jason Wong, senior market
strategist at BNZ in Wellington.
"The bigger picture is (the United States) has got massive
debt issuance for stimulus and to find a buyer for that debt you
either need higher rates or a lower currency or both, and at the
moment we're getting both."
The U.S. dollar index =USD was steady at 90.355.
HOT COMMODITY
Besides the U.S. budget deficit, a growing trade deficit has
also weighed on the dollar, as have the large gains that rising
commodity prices have delivered to exporters' currencies.
Copper has gained roughly 8% for the year and hit a
nine-year peak on Monday, oil has gained more than 22% for the
year to date, iron ore about 10% and dairy prices nearly 7%.
The Aussie dollar, which rose nearly 40% from last March's
trough through to the end of 2020 has added another 2% this
year, while the kiwi and Canadian dollar have added 1% or more
and analysts said the rallies might have further to run.
"We are recommending a long AUD/USD trade idea," said
analysts at MUFG Bank in a note to clients. "The Aussie is
continuing to benefit from the outperformance from building
optimism over the global growth/reflation outlook which is
helping to improve Australia's terms of trade."
The bank also recommends a long sterling position as
diminished Brexit uncertainty and solid progress in vaccinating
the British population herald a strong economic recovery.
Ahead on Monday, British Prime Minister Johnson is expected
to outline a roadmap out of lockdowns, a German sentiment survey
is due and European Central Bank President Christine Lagarde is
expected to sound dovish in a speech beginning at 1345 GMT.
Later in the week, the New Zealand central bank sets policy
on Wednesday and then U.S. Federal Reserve Chairman Jerome
Powell testifies before Congress, also on Wednesday.
In the cryptocurrency market, bitcoin BTC=BTSP eased
slightly to $56,159, but was still near a record high as the
digital asset gains more mainstream acceptance.
Ether ETH=BTSP , a rival cryptocurrency, fell to $1,871.
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Currency bid prices at 0415 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2121 $1.2118 +0.03% -0.79% +1.2135 +1.2110
Dollar/Yen JPY=D3 105.6400 105.4900 +0.14% +2.28% +105.7350 +105.5050
Euro/Yen EURJPY= 128.04 127.75 +0.23% +0.88% +128.1300 +127.7000
Dollar/Swiss CHF=EBS 0.8975 0.8965 +0.16% +1.49% +0.8979 +0.8962
Sterling/Dollar GBP=D3 1.4020 1.4001 +0.11% +2.60% +1.4051 +1.4012
Dollar/Canadian CAD=D3 1.2607 1.2619 -0.09% -0.99% +1.2617 +1.2581
Aussie/Dollar AUD=D3 0.7876 0.7868 +0.11% +2.39% +0.7908 +0.7864
NZ NZD=D3 0.7307 0.7297 +0.18% +1.80% +0.7337 +0.7292
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX
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World FX rates https://tmsnrt.rs/2RBWI5E
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