(Updates to late afternoon, adds new comments)
* Graphic: World FX rates tmsnrt.rs/2RBWI5E
By Stephen Culp
NEW YORK, Feb 16 (Reuters) - The U.S. dollar rebounded from
three-week lows on Tuesday as Treasury yields hit pre-pandemic
highs and bullish economic sentiment boosted investor risk
appetite.
Bitcoin also surpassed $50,000 to a hit record high as it
continued to gain credibility among companies and investors.
Benchmark 10-year Treasury yields touched their highest
level since February 2020, adding upward pressure to the
greenback as economic optimism fueled the reflation trade.
That optimism was echoed by St. Louis Federal Reserve
President James Bullard, who said in an interview on CNBC that
U.S. financial conditions were "generally good," and that
inflation was likely to heat up this year.
The New York Fed's upbeat Empire State manufacturing report
offered a rosier economic picture than suggested by data
released last week.
"High yields are providing the dollar with a little bit of
support," said Shaun Osborne, chief FX strategist at Scotiabank
in Toronto. "But a lot of folks believe rising yields are going
to be accompanied with higher inflation."
"I'm not sure today's action is telling us a lot about the
overall trend," Osborne added. "I think the dollar is likely to
trade more softly going forward."
Against a basket of its rivals, the dollar gained
0.21% to 90.508, after earlier falling to 90.117, its lowest
level since Jan. 26.
Bitcoin breached $50,000 to touch an all-time high of
$50,602, but had last pulled back to $48,675.18. The world's
largest cryptocurrency has risen around 68% so far this year,
boosted by Tesla Inc's announcement that it had bought
$1.5 billion in bitcoin.
Despite bitcoin's rally, Osborne was skeptical.
"As larger corporations take an interest it does give it
more legitimacy, but it still seems like a speculative, retail
trade at this point," he said.
The euro reversed its gains against the
strengthening dollar and was last down 0.10%. Rising oil prices
briefly lifted the Canadian dollar and Norwegian crown
.
The dollar also gained on the safe-haven Japanese yen
, which fell through its 200-day moving average against
the dollar and struck multiyear lows against the euro, Aussie
and Swiss franc.
Sterling pared its gains against the dollar, and
was last essentially flat against the greenback after touching
its highest level since April 2018 due to Britain's vaccine
rollout progress.
The risk-sensitive Australian dollar briefly hit a
one-month high of $0.7805 and the kiwi touched a
five-week peak of $0.7268, before retreating.
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Currency bid prices at 2:56PM (1956 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 90.5080 90.3340 +0.21% 0.586% +90.6410 +90.1170
Euro/Dollar $1.2113 $1.2125 -0.10% -0.86% +$1.2170 +$1.2095
Dollar/Yen 105.8800 105.3000 +0.58% +2.54% +105.9600 +105.2000
Euro/Yen 128.25 127.78 +0.37% +1.05% +128.3300 +127.7500
Dollar/Swiss 0.8920 0.8901 +0.21% +0.83% +0.8930 +0.8872
Sterling/Dollar $1.3909 $1.3908 +0.01% +1.82% +$1.3951 +$1.3870
Dollar/Canadian 1.2681 1.2644 +0.32% -0.39% +1.2702 +1.2610
Aussie/Dollar $0.7762 $0.7780 -0.21% +0.92% +$0.7805 +$0.7745
Euro/Swiss 1.0804 1.0795 +0.08% -0.03% +1.0807 +1.0788
Euro/Sterling 0.8706 0.8724 -0.21% -2.58% +0.8739 +0.8698
NZ $0.7212 $0.7228 -0.19% +0.46% +$0.7267 +$0.7198
Dollar/Dollar
Dollar/Norway 8.4270 8.3770 +0.57% -1.89% +8.4490 +8.3600
Euro/Norway 10.2080 10.1740 +0.33% -2.47% +10.2315 +10.1527
Dollar/Sweden 8.2880 8.2647 -0.03% +1.12% +8.3021 +8.2548
Euro/Sweden 10.0406 10.0435 -0.03% -0.36% +10.0570 +10.0320
(Reporting by Stephen Culp; Editing by Sonya Hepinstall)
