FOREX-Dollar resumes bounce from multi-year lows

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By Saqib Iqbal Ahmed

NEW YORK, Jan 13 (Reuters) – The dollar was generally up on Wednesday, shaking off the weakness of the previous session, as it prolonged its recent rebound from the nearly three-year lows hit last week.

* The advance of the yield of US Treasuries, driven by expectations of higher government spending under the Joe Biden government, has helped the recovery of the battered dollar in recent sessions.

* The greenback was also supported by expectations of a continued economic recovery in the United States, even as European countries are turning to lockdowns to stem a second wave of COVID-19 infections.

* Bond yields fell a bit on Wednesday, after officials at the Federal Reserve denied that they will tighten monetary conditions anytime soon, even despite the prospect of accelerating inflation later on.

* The return on benchmark 10-year notes fell to 1,110% in early trading, below the nearly 10-month high of 1,187% hit Tuesday.

* Still, the stabilization of the 10-year yield above 1% has affirmed the bottom under the dollar, Joe Manimbo of Western Union Business Solutions in Washington said in a note.

* The dollar index was up 0.344% to 90.335 units.

* The British pound hit a seven-week high against the euro, prolonging the momentum achieved on Tuesday after the Bank of England governor rejected the adoption of negative interest rates, while optimism about the pace of British vaccination also offered support.

(Edited in Spanish by Carlos Serrano)


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