FOREX-Dollar ascendant as Powell stays dovish course; risk currencies slide


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    * Graphic: World FX rates

    By Kevin Buckland
    TOKYO, March 5 (Reuters) - The dollar held firmly near
three-month highs on Friday after surging overnight as Federal
Reserve Chair Jerome Powell stuck with dovish rhetoric despite a
recent spike in bond market volatility.
    The U.S. currency soared the most in a month after Powell
said the violent sell-off in Treasuries last week was "notable
and caught my attention" but was not "disorderly" or likely to
push long-term rates so high the Fed might have to intervene
more forcefully.*:nL2N2L2262
    Instead, he reiterated a commitment to maintain ultra-easy
monetary policy until the economy is "very far along the road to
    Powell's remarks reignited selling in Treasuries, with the
benchmark 10-year Treasury yield  US10YT=RR  jumping back above
1.5% and rising as high as 1.5830% in Asia. Last week, it had
soared to a three-month top of 1.614%.*:nL2N2L22T0
    Riskier currencies including the Australian and New Zealand
dollars slid along with stocks as investor sentiment again
turned sour. 
    "Quite a night for market volatility, with the bond market
the centre of attention," Ray Attrill, head of forex strategy at
National Australia Bank in Sydney, wrote in a client note.
    "The market was seemingly looking for Powell to push back
harder on the recent increase in yields." 
    The dollar index  =USD  was little changed at 91.660 early
in the Asian session after gaining 0.7% overnight.
    The euro  EUR=EBS  slipped 0.1% to $1.19635, a one-month
low, following a 0.7% slump overnight.
    The dollar eased slightly to 107.835 yen  JPY=EBS , but
remained near the multi-month high at the cusp of 108 touched
during Thursday's 0.9% surge.
    The safe-haven dollar has been supported both by the higher
Treasury yields themselves, and the upswing in risk aversion the
bond rout has fomented.
    Impending U.S. fiscal stimulus is adding fuel to
expectations of higher inflation, as the accelerating rollout of
COVID vaccines heightens optimism for an economic recovery.*:nL2N2L21QX
    While many analysts expect commodity-linked currencies to
climb as economies reopen after the pandemic, they have been
hurt by the souring mood.
    The Aussie  AUD=D3  weakened 0.3% to $0.7705, extending
Thursday's 0.7% drop. The kiwi  NZD=D3  fell 0.2%, adding to its
0.8% slide overnight.

    Currency bid prices at 106 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar       EUR=EBS    $1.1956        $1.1973     -0.12%         -2.13%      +1.1977     +1.1956
 Dollar/Yen        JPY=D3     107.8850       107.9400    -0.06%         +4.44%      +107.9970   +107.8750
 Euro/Yen          EURJPY=    129.00         129.25      -0.19%         +1.64%      +129.3100   +129.0200
 Dollar/Swiss      CHF=EBS    0.9293         0.9288      +0.05%         +5.04%      +0.9296     +0.9288
 Sterling/Dollar   GBP=D3     1.3875         1.3897      -0.13%         +1.59%      +1.3895     +1.3879
 Dollar/Canadian   CAD=D3     1.2687         1.2667      +0.17%         -0.35%      +1.2687     +1.2661
 Aussie/Dollar     AUD=D3     0.7699         0.7721      -0.25%         +0.11%      +0.7726     +0.7701
 NZ                NZD=D3     0.7162         0.7186      -0.29%         -0.22%      +0.7192     +0.7165
All spots  FX= 
Tokyo spots  AFX= 
Europe spots  EFX=  
Volatilities  FXVOL=  
Tokyo Forex market info from BOJ  TKYFX  


World FX rates
 (Reporting by Kevin Buckland; Editing by Stephen Coates)

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