FOREX-Dollar hits three-month highs as Fed's Powell sticks to script

Reuters

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 (Recasts with move after comments from Fed's Powell, adds
quotes, updates prices, adds data outlook)
    * Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

    By Karen Brettell
    NEW YORK, March 4 (Reuters) - The dollar surged to
three-month highs on Thursday after Federal Reserve Chairman
Jerome Powell failed to express concern about a recent sell-off
in U.S. Treasuries as some traders had expected, resulting in
higher bond yields and demand for the greenback.
    Powell set aside concern that a recent move up in U.S.
Treasury yields might spell trouble for the Fed as investors
push up borrowing costs the central bank wants to keep low.
    While Powell said the increase was "notable and caught my
attention," he did not consider it a "disorderly" move, or one
that pushed long-term rates so high the Fed might have to
intervene in markets more forcefully to bring them down, such as
by increasing its $120 billion in monthly bond purchases.
 urn:newsml:reuters.com:*:nL2N2L2262
    Some investors expected Powell to “at least acknowledge that
there is some concern regarding the pop in yield, which he
didn’t do,” said Minh Trang, senior FX trader at Silicon Valley
Bank in Santa Clara, California. 
    “Overall his message remains the same, which is essentially
they will maintain looser monetary policy until the economy
shows consistent strength and we get back closer to what we were
pre-pandemic in regards to both inflation and the labor market,”
Trang said.
    The dollar index  =USD  was last up 0.53% at 91.561, after
getting as high as 91.663, the highest since Dec. 1. The euro
 EUR=EBS  dipped 0.73% to $1.1973, the lowest since Feb. 5.
    Benchmark 10-year Treasury yields  US10YT=RR  got as high as
1.555% but are holding below a one-year high of 1.614% reached
last week.
    The dollar has gained along with U.S. government bond yields
as impending U.S. fiscal stimulus adds fuel to expectations of
higher inflation and the rollout of vaccines against COVID-19
heightens optimism that the economy headed for recovery.
    "The U.S. is assuming the leadership position on growth
matters, fiscal dominance and certainly vaccinations," said
Mazen Issa, senior FX strategist at TD Securities in New York.
    Jobs data for February on Friday is the next major U.S.
economic focus.
    The Swiss franc and the Japanese yen continued their recent
weakness. They have been hurt expectations the U.S. will lead
global growth, which some analysts are calling U.S.
exceptionalism.
    "The traditional (funding currencies) like euro, yen and
Swiss, look to be particular laggards in that environment under
a higher U.S. yield backdrop," said TD’s Issa.
    The franc  CHF=D3  weakened as far as 0.9297, the lowest
since July 23. The yen  JPY=D3  reached 107.93, its weakest
since July 1.
    Higher-risk currencies, including the Australian dollar, by
contrast, are positioned to outperform as global growth
improves. The Aussie  AUD=D3  gave back earlier gains on
Thursday, however, as stocks fell. It was last down 0.57% on the
day at $0.7730, and is holding below three-year highs of $0.8007
reached last week.
    In the cryptocurrency market, bitcoin  BTC=BTSP  fell 5.36%
to $47,691. Ether  ETH=BTSP  dropped 3.21% to $1,518.
    
========================================================
    Currency bid prices at 2:53PM (1953 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
                                              Session                                             
 Dollar index      =USD       91.5610        91.0970     +0.53%         1.756%        +91.6630    +90.9700
 Euro/Dollar       EUR=EBS    $1.1973        $1.2062     -0.73%         -2.00%        +$1.2065    +$1.1966
 Dollar/Yen        JPY=D3     107.8550       106.9600    +0.87%         +4.45%        +107.8950   +106.9900
 Euro/Yen          EURJPY=    129.13         129.08      +0.04%         +1.74%        +129.6300   +128.9200
 Dollar/Swiss      CHF=EBS    0.9290         0.9200      +0.98%         +5.01%        +0.9298     +0.9190
 Sterling/Dollar   GBP=D3     $1.3897        $1.3950     -0.33%         +1.77%        +$1.4016    +$1.3884
 Dollar/Canadian   CAD=D3     1.2651         1.2656      -0.03%         -0.64%        +1.2693     +1.2575
 Aussie/Dollar     AUD=D3     $0.7730        $0.7775     -0.57%         +0.49%        +$0.7814    +$0.7709
 Euro/Swiss        EURCHF=    1.1124         1.1094      +0.27%         +2.93%        +1.1151     +1.1077
 Euro/Sterling     EURGBP=    0.8613         0.8642      -0.34%         -3.63%        +0.8655     +0.8597
 NZ                NZD=D3     $0.7195        $0.7246     -0.69%         +0.21%        +$0.7272    +$0.7173
 Dollar/Dollar                                                                                    
 Dollar/Norway     NOK=D3     8.5750         8.4915      +0.87%         -0.26%        +8.6045     +8.4615
 Euro/Norway       EURNOK=    10.2707        10.2459     +0.24%         -1.88%        +10.3041    +10.1883
 Dollar/Sweden     SEK=       8.4919         8.4217      +0.15%         +3.61%        +8.5023     +8.4105
 Euro/Sweden       EURSEK=    10.1701        10.1544     +0.15%         +0.93%        +10.1795    +10.1413
 
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates    https://tmsnrt.rs/2RBWI5E
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Nick Zieminski)
 ((karen.brettell@thomsonreuters.com))

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