Home Bitcoin NewsBitCoin Forex CORRECTED-FOREX-Dollar drops with U.S. yields despite strengthening U.S. recovery

CORRECTED-FOREX-Dollar drops with U.S. yields despite strengthening U.S. recovery

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 (Corrects intraday dollar-yen level to below 110, not below
109, in paragraph 3)
    * Greenback retreats with 10-year Treasury yield below 1.7%
    * Strong U.S. data lifts Wall Street stocks to record highs
    * Bitcoin above $59,000 as crypto market cap tops $2
    * Graphic: World FX rates tmsnrt.rs/2RBWI5E

    By Kevin Buckland
    TOKYO, April 6 (Reuters) - The dollar sank to an almost
two-week low versus a basket of its peers on Tuesday, moving in
tandem with retreating Treasury yields from recent peaks despite
signs of a robust U.S. economic recovery.    
    The dollar index wallowed at its lowest level since
March 25, slipping further in early Asian trading following a
0.4% decline on Monday. The softer turn comes after it hit an
almost five-month peak on Wednesday of last week.
    The yen continued to recover from a more than
one-year low near 111 per dollar, briefly strengthening back
below 110 on Tuesday. The euro extended its rise from a
nearly five-month trough close to $1.17 to trade as high as
    The Australian dollar, considered a proxy for risk
appetite, edged higher to $0.7657 after rallying 0.8% to start
the week. The Reserve Bank of Australia will announce a policy
decision later on Tuesday, with no change expected.
    The greenback has risen strongly this year, along with
Treasury yields, as investors bet on a faster U.S. pandemic
rebound than other developed nations amid massive stimulus and
aggressive vaccinations.
    But the dollar’s drop this week even after Friday's
much-stronger-than-expected monthly payrolls data was followed
on Monday by the highest reading for services industry activity
on record may indicate that much of the bullish outlook is
priced in for now.
    "While the U.S. does look exceptional, COVID normalization
over time means the rest of the world will converge," Mark
McCormick, the global head of foreign-exchange strategy at TD
Securities, wrote in a client note.
    "The USD level has now outstripped the pickup in non-U.S.
growth expectations," meaning "there's room for a USD pause" in
its recent uptrend, he wrote.
    Benchmark 10-year Treasury yields continued
their retreat Tuesday, dipping below 1.7% early in the Asian
session, from a peak of 1.776% last week - a level not seen
since January of last year.
    That's even as the robust economic outlook boosted U.S.
stocks to record highs.
    The dollar has generally risen as stocks gained over the
past few months. Investors are now watching to see if that
relationship may have shifted.
    “The trickiest thing for markets right now is to figure out
what the dollar’s sensitivity is to good U.S. economic news,”
said Erik Nelson, a macro strategist at Wells Fargo in New York.
    “This is a huge question because if we’re entering a phase
where the dollar is no longer a safe haven and more of a ‘risk
on’ currency, that’s big regime change.” 
    In cryptocurrencies, bitcoin firmed following a
two-day gain to trade about $59,192 on Tuesday, closing the gap
to the record high at $61,781.83 reached in the middle of last
    The cryptocurrency market capitalization hit an all-time
peak of $2 trillion on Monday, according to data and market
trackers CoinGecko and Blockfolio, as gains over the last
several months attracted demand from both institutional and
retail investors.

    Currency bid prices at 051 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar                  $1.1814        $1.1812     +0.02%         -3.30%      +1.1821     +1.1812
 Dollar/Yen                   110.2620       110.2150    -0.05%         +6.65%      +110.2770   +110.1600
 Euro/Yen                     130.28         130.13      +0.12%         +2.65%      +130.2800   +130.1200
 Dollar/Swiss                 0.9370         0.9363      +0.05%         +5.88%      +0.9370     +0.9359
 Sterling/Dollar              1.3902         1.3908      -0.02%         +1.78%      +1.3914     +1.3902
 Dollar/Canadian              1.2525         1.2518      +0.06%         -1.64%      +1.2526     +1.2517
 Aussie/Dollar                0.7653         0.7652      +0.04%         -0.49%      +0.7659     +0.7651
 NZ                           0.7063         0.7060      +0.04%         -1.64%      +0.7068     +0.7063
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Tokyo Forex market info from BOJ 

 (Reporting by Kevin Buckland)

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