Dollar hits 4-month high

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    TOKYO- The dollar advanced on Wednesday, hitting a four-month high against the yen as US bond yields jumped on the prospects of further economic recovery and a possible acceleration in inflation.

    Bitcoin held firm, a day after the cryptocurrency hit $50,000 for the first time, bringing its total market capitalization to more than $900 billion, as traders bet on its further acceptance among major companies.

    The dollar’s index against six other major currencies jumped back to 90.681, from a three-week low of 90.117 hit on Tuesday.

    Boosting the dollar was soaring US bond yields, with the 10-year yield rising to 1.331 percent from around 1.20 percent at the end of last week.

    “The move up in yields has been driven by increasing inflationary concerns amid a rise in energy prices along with the prospect of a big US fiscal stimulus and the global recovery entering a more solid stage as vaccine roll out lead to the reopening of economies,” said Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney.

    The yen, which is sensitive to US yields, reacted the most with the dollar jumping to a four-month high of 106.225 yen. It last stood at 106.13 yen.

    “I think the dollar’s downtrend is over. At the start of the year, speculators were betting on a fall in the dollar below 100 yen. They seem to have abandoned such a view now,” said Yukio Ishizuki, senior strategist at Daiwa Securities.

    The euro slipped slightly to $1.2085 though its fall was less pronounced due to its gains earlier on Tuesday following strong German economic sentiment data.

    The New York Federal Reserve’s Empire State manufacturing report released on Tuesday offered an upbeat economic picture, with a rise in its “prices paid index” stoking fear of faster inflation. – Reuters