FOREX-Dollar extends rebound as investors await U.S. stimulus details, bitcoin bounces

FOREX-Dollar extends rebound as investors await U.S. stimulus details, bitcoin bounces

Reuters  | Jan 14, 2021 12:42

FOREX-Dollar extends rebound as investors await U.S. stimulus details, bitcoin bounces

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By Kevin Buckland

TOKYO, Jan 14 (Reuters) - The dollar extended its rebound from near three-year lows versus major peers on Thursday, supported by higher U.S. yields, as President-elect Joe Biden prepared to outline his plans for massive fiscal stimulus.

The dollar index =USD held onto gains made on Wednesday in early Asian trading as investors continued to unwind bearish bets. The dollar has risen in four of the past five trading sessions as the prospect of more stimulus has weighed on U.S. government bonds, sending the benchmark Treasury yield above 1% for the first time since March.

Bitcoin BTC=BTSP also held on to 10% gains made on Wednesday as it rebounded after sliding almost $12,000 from an all-time high of $42,000 hit last week.

Biden will give details on Thursday of a plan for "trillions" of dollars in pandemic relief. Expectations that more stimulus will fuel faster growth has lifted U.S. yields, which in turn supported the dollar. many analysts expect the currency's bounce to be temporary, as a build up of bearish dollar positions are shaken out. Longer term, they expect more U.S. stimulus to support risk sentiment, weighing on the greenback, which is traditionally considered a safe-haven.

"I think positioning in risk assets is becoming a concern, so there could be a squeeze in the dollar near-term," said Shusuke Yamada, chief Japan FX strategist at Bank of America (NYSE:BAC) in Tokyo.

"I am focusing on gradual dollar weakness in 2021."

FX speculators have been net short the dollar since mid-March, as investors' surging appetite for riskier assets hurt demand for the greenback. dollar index traded little changed at 90.292 after adding 0.3% overnight. It fell as low as 89.206 on Jan. 6 for the first time since March 2018.

The euro EUR=EBS was largely steady at $1.2164 after sliding 0.4% on Wednesday.

The greenback was little changed at 103.925 yen JPY=EBS , following a 0.1% rise previously.

Bitcoin was 0.6% higher at $37,655 on Thursday, up from as low as $30,261.13 on Jan. 11. ========================================================

Currency bid prices at 10:06AM (106 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=EBS

$1.2165

$1.2159

+0.05%

-0.43%

+1.2171

+1.2155 Dollar/Yen

JPY=D3

103.8670

103.8850

+0.01%

+0.59%

+103.9200 +103.8150 Euro/Yen

EURJPY=

126.37

126.28

+0.07%

-0.43%

+126.4300 +126.2300 Dollar/Swiss

CHF=EBS

0.8871

0.8875

-0.04%

+0.28%

+0.8877

+0.8871 Sterling/Dollar GBP=D3

1.3651

1.3637

+0.10%

-0.09%

+1.3651

+1.3644 Dollar/Canadian CAD=D3

1.2686

1.2701

-0.10%

-0.36%

+1.2699

+1.2688 Aussie/Dollar

AUD=D3

0.7749

0.7734

+0.20%

+0.74%

+0.7750

+0.7733 NZ

NZD=D3

0.7191

0.7175

+0.24%

+0.15%

+0.7193

+0.7182 Dollar/Dollar

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates

https://tmsnrt.rs/2RBWI5E

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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