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The dollar hit a seven-month high against the yen on Thursday as a more orderly rise in U.S. Treasury yields lent support ahead of a speech by Federal Reserve Chairman Jerome Powell that may determine the trend for global bond markets and currencies.

The dollar also traded near a three-month high against the Swiss franc and held on to gains against most currencies as a renewed sense of calm in the Treasury market underpinned sentiment.

 

However, the greenback lost ground against its Australian and New Zealand counterparts as traders who expect stronger global growth continued to stock up on commodity currencies.

Investors are anxious to see if Powell expresses concern about a recent volatile sell-off in Treasuries and if there is any change in his assessment of the economy before the Fed’s next meeting ending March 17.

The dollar rose to 107.09 yen, the highest since July last year.

The U.S. currency bought 0.9191 Swiss franc, close to the highest since November.

The British pound steadied at $1.3955, while the euro traded at $1.2057, nursing a 0.24% loss from the previous session.

The benchmark 10-year Treasury yield edged up to 1.4757%.

A chaotic sell-off in Treasuries from the start of the year on concerns that massive government spending to support the global economy may drive up inflation culminated in 10-year yields rising to a one-year high of 1.6140% last week.

The move was so rapid that global stock markets tumbled and the dollar swooned against most currencies, but the greenback has since regained its composure as disorderly selling of Treasuries ebbed, for now at least.

The dollar index stood at 91.005 against a basket of six major currencies, holding on to a 0.32% gain from Wednesday.

In the cryptocurrency market, bitcoin fell 1.49% to $49,647, while rival digital currency ether fell 0.65% to $1,557.

Bitcoin has surged 78% so far this year as it gains more acceptance in the financial services industry, but the U.S. financial regulator is likely to start working on guidelines for digital assets, which could increase scrutiny of cryptocurrencies.

Reference: Reuters