Dollar hits new one-year high to yen on US pandemic recovery optimism

TOKYO: The dollar rose to a fresh one-year high versus the yen and traded near multi-month peaks with other rivals on Wednesday as investors bet that massive fiscal stimulus and aggressive vaccinations will help the US lead a global pandemic recovery.

President Joe Biden is set to outline later on Wednesday how he intends to pay for a $3-$4 trillion infrastructure plan, after earlier this week saying 90% of adult Americans would be eligible for vaccination by April 19.

The dollar index held above 93 after surging as high as 93.357 on Tuesday. It has climbed from close to 90 at the start of March, on course for its best month since 2016.

The greenback set a fresh one-year top of 110.48 yen early in Wednesday's Asian session, and hovered near Tuesday's almost five-month high of $1.1711 per euro.

"US economic outperformance can continue to underpin the USD in the near term," Commonwealth Bank of Australia currency strategist Carol Kong wrote in a client note.

"JPY will be driven by the general USD strengthening trend," potentially rising to 113 by year-end, she said.

The dollar was also supported from a spike in US bond yields, which make the currency more attractive as an investment.

The yield on the benchmark 10-year Treasury note jumped to a one-year high of 1.776% on Tuesday.

Investors will watch closely monthly US nonfarm payrolls data on Friday, with Federal Reserve policymakers so far citing slack in the jobs market for their continued lower-for-longer stance on interest rates, which has boosted the growth outlook but also stoked worries about inflation.

Data overnight showed US consumer confidence soared this month to the highest since the start of the pandemic, supporting views that economic growth will accelerate in the coming months, driven by more fiscal stimulus and an improving public health situation.

Australia's dollar edged up to $0.7608, consolidating after its drop to $0.7564 last week, the lowest level seen this year.

The Chinese yuan traded around 6.57 per dollar in the offshore market, from the weakest since November at 6.5838, touched on both Monday and Tuesday.

Bitcoin traded just below $59,000, trying to close the distance to the record peak at $61,781.83 set earlier this month.

PayPal Holdings said Tuesday it launched a "Checkout with Crypto" service, which will allow US users to use their cryptocurrency holdings to pay online merchants globally.