{"id":112225,"date":"2021-02-11T01:48:10","date_gmt":"2021-02-11T01:48:10","guid":{"rendered":"https:\/\/precoinnews.com\/?p=112225"},"modified":"2021-02-11T01:48:10","modified_gmt":"2021-02-11T01:48:10","slug":"dollar-struggles-as-u-s-yields-soften-bitcoin-soars","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/dollar-struggles-as-u-s-yields-soften-bitcoin-soars\/","title":{"rendered":"Dollar struggles as U.S. yields soften; Bitcoin soars"},"content":{"rendered":"
LONDON (Reuters) – The U.S. dollar was firmly pinned at a one-week low on Tuesday as an overnight slide in U.S. Treasury yields raised doubts on the outlook for the greenback against the backdrop of a looming U.S. fiscal stimulus package.<\/p> Investors have pushed up the dollar recently as Democrats moved to fast-track President Joe Biden\u2019s $1.9 trillion COVID-19 relief package. But some analysts say massive fiscal spending coupled with continued ultra-easy Federal Reserve monetary policy will ultimately prove to be a dollar headwind.<\/p>\n \u201cThere has been an impressive pullback in U.S. Treasury yields overnight which is causing the broad-based dollar weakness before the bond auctions this week,\u201d said Kenneth Broux, a strategist at Societe Generale in London.<\/p>\n In Monday\u2019s trading, ten-year U.S. Treasury yields rose to near March 2020 highs as investors bet on a broader reflationary theme in the financial markets. But it has slipped back to 1.16%, down 4 bps from the overnight highs.<\/p>\n Tuesday raised familiar doubts among investors, with some traders saying the fresh fiscal stimulus along with record low U.S. interest rates will weigh on the currency in the coming months.<\/p>\n \u201cWhereas until recently the prospect of fiscal support caused positive reactions on the markets, the market no longer seems to be entirely certain about that any longer,\u201d Commerzbank strategists said.<\/p>\n The dollar index was 0.5% lower at 90.50 in London trading, its lowest level since Feb. 1.<\/p>\n Disappointing U.S. jobs data on Friday knocked the wind out of a two-week run that had lifted the dollar to a more than two-month high of 91.6.<\/p>\n The biggest beneficiary of the weakening dollar was cryptocurrencies with bitcoin rocketing above $48,000, building on a nearly 20% surge overnight after Tesla Inc announced a $1.5 billion investment in the digital asset.<\/p>\n Graphic: USD-Positions<\/p>\n The yen was another major beneficiary of the weak dollar trend, with the Japanese unit rising 0.5% against the U.S. dollar to 104.69 yen.<\/p>\n The yen has become increasingly correlated with outright yields than an indicator of broad risk sentiment. A 90-day rolling correlation between yen and U.S. yields has strengthened considerably since the final quarter of 2020.<\/p>\n Elsewhere, the euro rose 0.5% to $1.2099 on Tuesday, up from a two-month low of $1.1952 touched Friday.<\/p>\n The British pound revisited its highs since May 2018, climbing to $1.3784 in Asia. It last traded up 0.3% at $1.3774.<\/p>\nBLISTERING BITCOIN<\/h2>\n