Dollar dips, Aussie gains on improving risk sentiment

(Adds quote, comments from CFTC's Gensler on Bitcoin, updates
prices)
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

(Updates prices, adds detail and commentary)
By Karen Brettell
NEW YORK, March 2 (Reuters) - The dollar dipped on Tuesday
and riskier currencies including the Australian dollar gained as
U.S. stocks were stable, reflecting improving risk appetite.
The greenback has been a beneficiary from recent volatility
in stocks, which were roiled last week by a dramatic jump in
U.S. government debt yields.
Treasuries have stabilized this week, with benchmark yields
holding below last week's highs, helping to restore some market
calm.
On Tuesday, "Wall Street largely retained Monday's sharp
gains," which helped the U.S. currency "ease lower through the
N.Y. session," Ronald Simpson, managing director, global
currency analysis at Action Economics, said in a report.
The dollar index fell 0.31% to 90.731, after earlier
reaching a three-week high of 91.396.
The euro gained 0.36% to $1.2092.
Rising yields came as participants worried that an economic
recovery from the impact of the COVID-19 pandemic, combined with
fiscal stimulus, will cause a jump in inflation and potentially
faster tightening from the Federal Reserve.
The volatility also boosted the greenback as investors
unwound short positions in the currency.
“If you do see volatility, the natural inclination is to
take risk off the table; in this case it just basically means
getting out of existing positions, and the dollar shorts are
extremely elevated at this point” said Bipan Rai, North American
head of FX strategy at CIBC Capital Markets in Toronto.
Short U.S. dollar positions were $29.33 billion in the week
ended Feb. 23, according to data from the Commodity Futures
Trading Commission.
Riskier currencies including the Australian dollar continued
to rebound from last week’s sell-off, with the Aussie also
gaining after the Reserve Bank of Australia recommitted to
keeping interest rates at historic lows.
The currency was last up 0.77% at $0.7831, though
it remains below the three-year high of $0.8007 reached on
Thursday.
Karen Jones, a technical analyst at Commerzbank, said that
the Aussie and other risky currencies including the Norwegian
krone appeared to be reversing from interim tops, which will
likely be positive for the U.S. dollar near-term.
The “U.S. dollar bear trend is probably over” for now, Jones
said in a report.
The greenback was last down 1.09% at 8.466 krone, but
is holding above the 8.313 krone per dollar level reached last
week, the weakest for the dollar in more than two years.
Safe-haven currencies including the Swiss franc and Japanese
yen, meanwhile, ended slightly stronger, reversing earlier
weakness.
The Swiss franc earlier hit its lowest since November 2020
against the dollar at 0.9193 while the yen
was the weakest since August at 106.95.
Bitcoin fell to a session low after Gary Gensler, President
Joe Biden's nominee to chair the U.S. Securities and Exchange
Commission, said that cryptocurrency has raised new investor
protection concerns.
It was last down 4.11% at $47,609.
Citi said in a report that the popular cryptocurrency was at
a "tipping point" and could become the preferred currency for
international trade or face a "speculative implosion."


========================================================
Currency bid prices at 3:23PM (2023 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 90.7310 91.0170 -0.31% 0.834% +91.3960 +90.7240
Euro/Dollar $1.2092 $1.2049 +0.36% -1.03% +$1.2094 +$1.1992
Dollar/Yen 106.7300 106.8800 -0.12% +3.35% +106.9500 +106.7150
Euro/Yen 129.05 128.61 +0.34% +1.68% +129.0600 +128.1900
Dollar/Swiss 0.9138 0.9148 -0.11% +3.29% +0.9193 +0.9138
Sterling/Dollar $1.3967 $1.3926 +0.30% +2.24% +$1.3976 +$1.3860
Dollar/Canadian 1.2610 1.2645 -0.26% -0.96% +1.2697 +1.2601
Aussie/Dollar $0.7831 $0.7772 +0.77% +1.81% +$0.7837 +$0.7737
Euro/Swiss 1.1050 1.1023 +0.24% +2.25% +1.1054 +1.1004
Euro/Sterling 0.8657 0.8651 +0.07% -3.13% +0.8667 +0.8638
NZ $0.7301 $0.7266 +0.50% +1.69% +$0.7306 +$0.7210
Dollar/Dollar
Dollar/Norway 8.4660 8.5590 -1.09% -1.41% +8.6270 +8.4660
Euro/Norway 10.2394 10.3100 -0.68% -2.17% +10.3790 +10.2268
Dollar/Sweden 8.3739 8.4235 -0.25% +2.17% +8.4703 +8.3752
Euro/Sweden 10.1263 10.1512 -0.25% +0.50% +10.1667 +10.1241




(Additional reporting by Elizabeth Howcroft in London; Editing
by Bernadette Baum and Jonathan Oatis)


First Published: 2021-03-02 03:17:28
Updated 2021-03-02 22:43:56


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