FOREX-Dollar ascendant as Powell stays dovish course; risk currencies slide


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

    By Kevin Buckland
    TOKYO, March 5 (Reuters) - The dollar held firmly near
three-month highs on Friday after surging overnight as Federal
Reserve Chair Jerome Powell stuck with dovish rhetoric despite a
recent spike in bond market volatility.
    The U.S. currency soared the most in a month after Powell
said the violent sell-off in Treasuries last week was "notable
and caught my attention" but was not "disorderly" or likely to
push long-term rates so high the Fed might have to intervene
more forcefully.
    Instead, he reiterated a commitment to maintain ultra-easy
monetary policy until the economy is "very far along the road to
recovery." 
    Powell's remarks reignited selling in Treasuries, with the
benchmark 10-year Treasury yield jumping back above
1.5% and rising as high as 1.5830% in Asia. Last week, it had
soared to a three-month top of 1.614%.
    Riskier currencies including the Australian and New Zealand
dollars slid along with stocks as investor sentiment again
turned sour. 
    "Quite a night for market volatility, with the bond market
the centre of attention," Ray Attrill, head of forex strategy at
National Australia Bank in Sydney, wrote in a client note.
    "The market was seemingly looking for Powell to push back
harder on the recent increase in yields." 
    The dollar index was little changed at 91.660 early
in the Asian session after gaining 0.7% overnight.
    The euro slipped 0.1% to $1.19635, a one-month
low, following a 0.7% slump overnight.
    The dollar eased slightly to 107.835 yen, but
remained near the multi-month high at the cusp of 108 touched
during Thursday's 0.9% surge.
    The safe-haven dollar has been supported both by the higher
Treasury yields themselves, and the upswing in risk aversion the
bond rout has fomented.
    Impending U.S. fiscal stimulus is adding fuel to
expectations of higher inflation, as the accelerating rollout of
COVID vaccines heightens optimism for an economic recovery.

    While many analysts expect commodity-linked currencies to
climb as economies reopen after the pandemic, they have been
hurt by the souring mood.
    The Aussie weakened 0.3% to $0.7705, extending
Thursday's 0.7% drop. The kiwi fell 0.2%, adding to its
0.8% slide overnight.


========================================================
    Currency bid prices at 106 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  $1.1956        $1.1973     -0.12%         -2.13%      +1.1977     +1.1956
 Dollar/Yen                   107.8850       107.9400    -0.06%         +4.44%      +107.9970   +107.8750
 Euro/Yen                     129.00         129.25      -0.19%         +1.64%      +129.3100   +129.0200
 Dollar/Swiss                 0.9293         0.9288      +0.05%         +5.04%      +0.9296     +0.9288
 Sterling/Dollar              1.3875         1.3897      -0.13%         +1.59%      +1.3895     +1.3879
 Dollar/Canadian              1.2687         1.2667      +0.17%         -0.35%      +1.2687     +1.2661
 Aussie/Dollar                0.7699         0.7721      -0.25%         +0.11%      +0.7726     +0.7701
 NZ                           0.7162         0.7186      -0.29%         -0.22%      +0.7192     +0.7165
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ 

    
  

    
 (Reporting by Kevin Buckland; Editing by Stephen Coates)
  

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