TOKYO (Reuters) – The US dollar held up on Monday after rebounding from a week-long low last week, bolstered by a spike in government bond yields of over a year, as inflation fears continued to melt away.
Bitcoin hovered around $ 60,000 after climbing to a record high of $ 61,781.83 over the weekend. Reuters reported on Monday that India is moving forward with a proposal to ban cryptocurrencies, which could be a possible blow to millions of investors piling themselves into the red-hot asset class.
The greenback rose 0.1% against the yen to 109.125 yen, nearing its high since June 2020. The euro remained broadly flat at $ 1.19485 after climbing for the first time in three weeks last week.
Market participants have grown wary in recent weeks that massive fiscal stimulus and pent-up consumer demand could lead to inflation leaps as increasing vaccination campaigns end lockdowns.
“The baseline scenario is that the economic recovery continues and the roll-out of vaccines continues and the contagion situation improves,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
“Both dollar and government bond yields are on the rise and there has been no major change in that view. The dollar will remain mostly stable against the yen and the euro in the near term, but it will not necessarily strengthen against commodity currencies as commodity prices rise. “
US producer prices posted their biggest annual increase in nearly 2-1 / 2 years, data showed on Friday, as the country’s economy will be given a huge opportunity by President Joe Biden’s $ 1.9 trillion stimulus package. .
The focus this week will be on the US Federal Reserve’s two-day policy meeting, although expectations are low that the central bank will announce major policy changes. The Bank of Japan will also hold its policy meeting later this week.
The dollar index, which tracks the US currency against six major counterparts, held up around 91,697 during Monday’s Asia session after climbing from near a one-week low of 91,364 at the end of last week.
The benchmark’s 10-year government bond yield was 1.6320% Monday, close to Friday’s high of 1.6420%.
The greenback was also supported by a drop in bets due to the drop, with speculators cutting net short positions to their lowest level since mid-November in the week ending March 9.
The Australian dollar – widely regarded as a liquid measure of risk appetite – fell 0.2% to $ 0.77465, extending Friday’s loss of 0.4%.
The Canadian dollar remained largely flat, having previously risen to C $ 1.2455 for the first time in three years. On Friday, larger-than-expected domestic job growth supported the view that the Bank of Canada would cut quantitative easing purchases next month.
Bitcoin was up about 2% at $ 60,205.56 after more than doubling in value this year.
India’s potential ban on cryptocurrencies comes along with bitcoin and its rivals have gained credibility following approval from major investors such as BlackRock Inc and business leaders including Tesla Inc’s Elon Musk and Twitter Inc’s Jack Dorsey.
Bid prices in currency at 0340 GMT
Description RIC Last US Close Pct Change YTD Pct High bid Low bid
Previous change
Session
Euro / Dollar $ 1.1953 $ 1.1953 -0.01% -2.18% +1.1968 +1.1943
Dollar / Yen 109.1250 109.0200 + 0.14% + 5.69% +109.1900 +108.9300
Euro / yen 130.43 130.29 + 0.11% + 2.77% +130.4500 +130.2800
Dollar / Swiss 0.9290 0.9296 -0.04% + 5.04% +0.9298 +0.9278
Sterling / dollar 1.3926 1.3970 -0.32% + 1.93% +1.3948 +1.3919
Dollar / Canadian 1.2476 1.2475 + 0.05% -1.99% +1.2480 +1.2455
Aussie / Dollar 0.7748 0.7758 -0.14% + 0.71% +0.7775 +0.7744
NZ 0.7198 0.7177 + 0.29% + 0.24% +0.7216 +0.7180
Dollar / Dollar
All places
Tokyo spots
Europe spots
Volatility
Tokyo Forex market information from BOJ
Reporting by Kevin Buckland in Tokyo and Sagarika Jaisinghani in Bengaluru; Editing by Muralikumar Anantharaman