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NEW YORK: The dollar rose for a second straight day on Tuesday, moving further off a near-one month low hit last week, as rising US Treasury yields prompted investors to cut short dollar positions against the euro before a European Central Bank meeting this week.

Cryptocurrencies including Bitcoin also dropped sharply in volatile trading as several trading platforms said they experienced performance issues.

On Friday, the greenback tumbled to its lowest levels since early August after a surprisingly soft US payrolls report prompted analysts to raise bets the Federal Reserve will not unwind its stimulus plans in coming months.

But the dollar has gained in the past two sessions. The greenback rose 0.31% on Tuesday to 92.48, after touching its lowest since Aug. 4 on Friday. “It does appear that after the sell-off the dollar has maybe established a short-term base at least,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

“The Federal Reserve we think is still likely to move towards tapering by the end of this year, the US economy is likely to perform relatively strongly, so our view is minor dollar dips, minor dollar weakness is probably a buying opportunity,” he said.

Data on Friday showed speculators’ net long bets on the US dollar grew in the latest week, with the value of the net long dollar position at $10.98 billion for the week ended Aug. 31, the largest long position since March 2020.

The dollar also benefited from rising US Treasury yields before the US government is due to sell $120 billion in new supply this week, including $58 billion in three-year notes, $38 billion in 10-year notes and $24 billion in 30-year bonds.

The yield increase “has helped the dollar index to recoup its post-NFP (non-farm payrolls) losses and then some,” Brown Brothers Harriman strategists said in a daily note. US 10-year yields which were around 1.299% before Friday’s data release, stand now at 1.366%.

The euro was last at $1.1849, below Friday’s one-month peak of $1.1909.

The ECB is seen debating a cut in stimulus at its meeting on Thursday, with analysts expecting purchases under the ECB’s Pandemic Emergency Purchase Programme (PEPP) falling possibly as low as 60 billion euros a month from the current 80 billion.

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