* Greenback nears four-month high after Germany extends
lockdown
* Yen also strengthens as Yellen defends need for higher
taxes
* Aussie weaker amid flare-up in tensions between West and
China
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Kevin Buckland
TOKYO, March 24 (Reuters) - The safe-haven U.S. dollar
approached a four-month high on Wednesday as concerns over a
third COVID-19 wave in Europe, potential U.S. tax hikes and
escalating tensions between the West and China sapped risk
appetite.
The yen also strengthened and U.S. Treasuries were bid while
Wall Street stocks and crude oil tumbled as investors weighed
the outlook for global growth.
The dollar index =USD rose to a two-week high at 92.412
early in the Asian session, approaching a four-month top of
92.506 hit earlier this month.
The gauge "looks determined to test the top end of a new,
higher 91-93 range we think will form in coming weeks," Westpac
strategists wrote in a client note.
"Extended European lockdowns have sapped confidence in a
synchronised global rebound; meanwhile, the U.S. will have an
impressive rebound in coming months amid a strong vaccine
roll-out, stimulus payments and economic reopenings," they said.
The euro EUR= edged toward a four-month trough below
$1.18355 - trading as low as $1.18360 - after Germany extended a
lockdown and urged its citizens to stay at home over the Easter
holiday. Worries over the pace of the pandemic recovery were also
heightened after a U.S. health agency said the AstraZeneca (NASDAQ:AZN) Plc
AZN.L vaccine may have included outdated information in its
data.
The flight to safety received an additional nudge when
Treasury Secretary Janet Yellen told lawmakers that future tax
hikes will be needed to pay for infrastructure projects and
other public investments.
Yellen was testifying to the House Financial Services
Committee along with Federal Reserve Chair Jerome Powell, who
reiterated that an expected near-term spike in inflation will be
transitory. That helped tame U.S. Treasury yields, with the benchmark
US10YT=RR dipping to 1.6048% on Wednesday, continuing its
retreat from a more than one-year high of 1.7540% touched last
week.
Both Yellen and Powell are also scheduled to testify to the
Senate Banking Panel on Wednesday.
Human rights sanctions on China imposed by the United
States, Europe and Britain, which prompted retaliatory sanctions
from Beijing, are adding to market concerns. The safe-haven yen JPY= was broadly stronger, and
Australia's dollar AUD= - considered a liquid proxy for risk -
weakened further on Wednesday.
The Aussie slipped to as low as $0.75985, a level not seen
since early February, and to 82.49 yen AUDJPY= for the first
time since the start of this month.
In cryptocurrencies, bitcoin BTC=BTSP languished below
$54,000, less than two weeks since hitting a record high of
$61,781.83.
========================================================
Currency bid prices at 122 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1844 $1.1850 -0.05% -3.07% +1.1854 +1.1836
Dollar/Yen JPY=D3 108.5500 108.5750 +0.00% +5.12% +108.6270 +108.5100
Euro/Yen EURJPY= 128.59 128.65 -0.05% +1.32% +128.7500 +128.4500
Dollar/Swiss CHF=EBS 0.9344 0.9338 +0.07% +5.62% +0.9347 +0.9337
Sterling/Dollar GBP=D3 1.3734 1.3754 -0.14% +0.53% +1.3755 +1.3725
Dollar/Canadian CAD=D3 1.2582 1.2588 -0.02% -1.17% +1.2597 +1.2581
Aussie/Dollar AUD=D3 0.7609 0.7626 -0.20% -1.07% +0.7633 +0.7599
NZ NZD=D3 0.6992 0.7000 -0.11% -2.64% +0.7007 +0.6986
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
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>