Early trade in New York: Dollar gains as US growth seen likely to outperform

NEW YORK: The dollar gained on Wednesday as investors priced for strong US growth relative to other regions, while the safe haven Japanese yen continued to weaken to a seven-month low.

Investors have boosted bets on US growth and inflation as the government prepares new fiscal stimulus, and speculation is rising that the Federal Reserve could also be closer to normalizing monetary policy than previously expected.

The dollar index was last up 0.22% at 90.997.

The euro dipped 0.30% to $1.2054.

The US currency has also benefited from a rise in US Treasury yields. Benchmark 10-year yields on Wednesday rose to 1.481%, though they are below a one-year high of 1.614% reached last week.

Riskier currencies including the Australian dollar dipped as stocks fell, indicating worsening risk sentiment.

The Aussie was last down 0.57% at $0.778. It has fallen from a three-year high of $0.8007 last week.

Meanwhile the safe haven Japanese yen continued to weaken, falling as far as 107.08 yen, the weakest since July 23.

The British pound was last down 0.06% on the day at $1.3950 after British finance minister Rishi Sunak said that Britain’s government would borrow significantly more in the coming financial year than thought just a few months ago.—Reuters