The dollar hit a two-week high on Tuesday, as risk appetite faded amid a sell-off in stocks, with U.S. Treasury Secretary Janet Yellen's comments saying interest rates may need to rise to prevent the American economy from overheating also supporting the greenback.
Yellen, in prepared remarks on Tuesday, made the comment as more of U.S. President Joe Biden's economic investment programs come on line. She did say that the additional spending was small compared to the relative size of the economy.
Analysts said much of the good news on the economy has likely been priced in by the market.
The dollar index , which measures the dollar's value against a basket of other major currencies, climbed 0.3% to 91.278. It fell more than 2% in April.
The euro fell 0.4% against the dollar to $1.2013 . Against the yen, the dollar rose 0.2% to 109.32 yen .
Sterling dipped 0.1% to $1.3881 ahead of a Bank of England meeting on Thursday, which may announce a slowdown in its bond buying program as the vaccine rollout bolsters Britain's economy.
In the cryptocurrency sector, ethereum powered to another record peak of $3,530 on Tuesday, amid increasing institutional interest. It was last down 1.7% at $3,370.
Dogecoin, created as a joke for early crypto adopters, hit an all-time high of US$0.5922. It was last up 36% at US$0.5549, according to CoinGecko.com.
TREASURIES-Yields pulled lower as risk appetite wanes
A safe-haven bid helped push U.S. Treasury yields lower on Tuesday, while U.S. Treasury Secretary Janet Yellen warned that rates may need to rise to keep the economy from running too hot.
The benchmark 10-year yield was last down 1 basis points at 1.5959%, holding below a 14-month high of 1.776% reached on March 30.
Yields slid amid a stock selloff with the Nasdaq down more than 2%. Later in the session, longer-dated yields ticked higher after the release of remarks by Yellen, who said interest rates may need "to rise somewhat" to prevent the economy from overheating.
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