US dollar crowns best quarter since June 2018 with one-year high vs yen

NEW YORK: The dollar rose on Wednesday, hitting a one-year high versus the yen and multi-month peaks with other currencies as investors bet fiscal stimulus and aggressive vaccinations will help the United States lead a global pandemic recovery.

The dollar index, a gauge of the greenback against six major currencies, however fell 0.1% to 93.189.

But it posted its biggest quarterly gain since June 2018, up 3.56%.

The index rose as far as 93.439, the highest in almost five months. It has climbed from close to 90 at the start of March, on course for its best month since July 2019.

The greenback held its gains following data showing the US economy added more than 500,000 private sector jobs in February.

US private payrolls increased by 517,000 jobs last month, the ADP National Employment Report showed on Wednesday, slightly lower than market forecasts. Data for February was revised up to show 176,000 jobs added instead of the initially reported 117,000.

"While ADP isn't a reliable gauge of how nonfarm payrolls might fare, it paints an improving picture of the labor market," said Joe Manimbo, senior market analyst at Western Union Business Solutions, in a research note.

Wall Street economists are forecasting US non-farm payrolls, due on Friday, of 647,000.

"Given markets' lofty expectations for March hiring, seen up by 650,000, the dollar could fall prey to the buy the rumor of good news and sell on the fact," he added.

The dollar set a one-year top of 110.97 yen and was last up 0.33% at 110.71 yen. For the quarter, the dollar posted gains of more than &%, its best performance since December 2016.

The euro, meanwhile, fell to a five month low versus the dollar at $1.1702, but was last up 0.12% at $1.1730. On the quarter, the euro was on track for its weakest showing since September 2019.

The dollar has been supported overall by a surge 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.

"With US Treasuries meaningfully under pressure yesterday, the environment is clearly supportive for the US dollar, particularly as Europe continues to battle with a third Covid wave," said ING's global head of markets, Chris Turner, in a note to clients.

US President Joe Biden announced his long awaited infrastructure plan late in the day, outlining sweeping use of government power to reshape the world's largest economy and counter China's rise in a $2 trillion-plus proposal that has been met with swift political resistance.

In the cryptocurrency market, bitcoin briefly topped $59,000, trying to close the distance to the record peak at $61,781.83 set earlier this month. It was last up 0.27% at $58,986. It gained 103% in the quarter featuring wider adoption by investors and corporations and increasing focus on its use in commercial payments.

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 worldwide, adding to the growing global acceptance of the digital tokens on both Wall Street and Main Street.