Early trade in New York: Dollar pares gains before Powell speaks

NEW YORK: The dollar pared earlier gains on Thursday before an appearance by Federal Reserve Chairman Jerome Powell that will be watched for any sign the Fed is uncomfortable with US Treasury yield increases.

The dollar has gained along with US government bond yields as impending US fiscal stimulus adds fuel to expectations of higher inflation and the rollout of vaccines against COVID-19 heightens optimism that the economy headed for recovery.

The dollar index was little changed on the day at 91.094, after earlier rising to 91.223. The euro dipped 0.19% to $1.2039.

Investors want to see whether Powell expresses concern about a recent sell-off in Treasuries and if there is any change in his assessment of the economy before the Fed’s next meeting, ending March 17.

Benchmark 10-year Treasury yields were last 1.47% after earlier rising as high as 1.49%.

The franc weakened as far as 0.9253, the lowest since Sept. 28. The yen reached 107.48, its weakest since July 20.

Higher risk currencies, including the Australian dollar, by contrast, are positioned to outperform. The Aussie was last up 0.22% on the day at $0.7792, holding below three-year highs of $0.8007 reached last week.

In the cryptocurrency market, bitcoin fell 1.23% to $49,775. Ether gained 1.06% to $1,583.—Reuters