The safe-haven yen and Swiss franc stood tall on Friday, while risk-sensitive currencies including the Australian and New Zealand dollars dipped to fresh multi-month lows as investors turned cautious about the global economic recovery.
Bonds have rallied while stocks took a hammering worldwide amid growing concerns the fast-spreading Delta variant of COVID-19 could derail a revival that is already showing pockets of weakness.
The benchmark U.S. Treasury yield dipped to a nearly five-month low of 1.25% overnight, before rebounding to 1.3433% in Asia. It was as high as 1.5440% just two weeks ago.
That decline in yields has pressured the U.S. currency. The dollar index clawed back part of Thursday's 0.36% slide, rising less than 0.1% to 92.454. On Wednesday, it had pushed to a three-month high of 92.844.
The euro held on to most of a 0.45% jump from overnight, slipping less than 0.1% to $1.18355.
The yen changed hands at 109.915 per dollar, weakening about 0.15% after the previous session's 0.8% rally.
Data on Thursday showed the number of Americans filing new claims for unemployment benefits rose unexpectedly last week, an indication that the labour market recovery from the COVID-19 pandemic continues to be choppy.
The Swiss franc held on to gains from Thursday, when it soared more than 1%, to trade at 0.91525 per dollar.
The Aussie slipped a further 0.2% to $0.74175 after earlier touching a fresh low for the year at $0.7410. On Thursday, it posted a 0.7% decline.
New Zealand's kiwi lost 0.1% to $0.69365, and dipped as low as $0.6923, matching the weakest level since November. It had plunged more than 1% in the previous session.
· Yields rise in Asia as rally momentum ebbs
Treasury prices edged slightly lower in Asia on Friday, snapping an eight-session rally, with traders taking profit from a sudden flattening of yield curves as markets careen from worrying about high inflation to worrying about a slowdown in growth.
The yield on benchmark 10-year U.S. Treasuries rose as far as 5.1 basis points to 1.3460% before settling around 1.3310% during the Tokyo afternoon. Thirty-year yields rose 3.5 basis points to 1.9606%.
Reference: Reuters, CNBC
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