SINGAPORE- The dollar nursed losses on Wednesday as a retreat in US yields sapped momentum from its recent rebound and investors cautiously resumed bets that it can resume sliding.
Benchmark 10-year Treasury yields fell nearly 7 basis points from a 10-month high hit on Tuesday and the turnaround snuffed out a three-day streak for the dollar.
Against the euro, it posted its sharpest daily fall in more than a month and it dropped more than 1 percent against the pound, which was also boosted by the Bank of England governor talking down the prospect of negative rates.
The Australian and New Zealand dollars rose from one-week lows, lifting the Aussie above 77 cents again to sit at $0.7680 and the kiwi over 72 cents to trade at $0.7226.
The dollar fell through 104 Japanese yen to trade at 103.63 yen on Wednesday and the Chinese yuan also held gains to begin the day at a one-week high in offshore trade.
The moves press the dollar back toward multi-year lows, although it clung above those levels in Asia as the bounce this week has tempered some traders’ confidence in the consensus view that US trade and budget deficits will drive it lower.
“The upward correction in the dollar index looks to be over and the downtrend has resumed,” ANZ analysts said in a note.
