- Dollar index hits more than one-week high
- Fed says it will let bank ratio expire on March 31
- BoJ widens its target band for 10-year yields
- Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Recasts, adds Fed decision on bank ratio, new analyst comment, updates prices, FX table, changes byline, dateline; previous LONDON)
The dollar extended gains against major currencies on Friday, hitting a more than one-week high, as investors digested a move from the Federal Reserve to lift a key bank leverage ratio that has pushed U.S. Treasury yields off their lowest levels of the day.
The greenback in recent weeks has risen in line with higher Treasury yields. Since early January, the dollar index, a gauge of its value against six major currencies has gained about 3.3%, while the benchmark U.S. 10-year note has climbed about 80 basis points.
The Fed announced on Friday that it will let a temporary bank leverage rule exemption expire on March 31. The Fed had put the rule in place to encourage bank lending as American households and businesses were hurt by lockdowns.
The dollar index was last up 0.3% on the day at 92.138 and on track for around a half of a percent gain over the week. =USD . It had fallen sharply in the wake of the Fed's announcement about its loose policy stance on Wednesday.
"I see the dollar being a bit firmer today but not outside of its recent ranges," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
"The underlying macro force is still a divergence, no one can keep up with aggressiveness of U.S. monetary and fiscal policy."
The U.S. 10-year yield US10YT=RR rose on Friday after the Fed decision on the leverage rule, and was last up at 1.737. It hit a more-than-one-year peak of 1.754% in the previous session.
The Fed pledged this week to press on with aggressive monetary stimulus, saying a near-term spike in inflation would prove temporary amid projections for the strongest U.S economic growth in nearly 40 years.
"The disappointment about the Fed's unchanged dovish approach only put the dollar under pressure momentarily," currency analysts at Commerzbank said in a note.
The euro dipped 0.3% at $1.188 0 EUR=EBS , giving up early gains versus the dollar amid concerns about further coronavirus lockdowns in Europe, after France imposed a new four-week lockdown from Friday in 16 regions badly hit by the health crisis.
The yen was roughly flat at 108.93 Yen JPY=EBS after the Bank of Japan widened its target band for the benchmark yield in a decision that was in line with market expectations.
In the cryptocurrency market, bitcoin BTC=BTSP traded 1.2% higher at around $58,382 after briefly topping $60,000 again the previous day.
======================================================== Currency bid prices at 10:26 a.m. (1426 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 92.0990 91.8280 +0.31% 2.354% +92.1660 +91.6550 Euro/Dollar EUR=EBS $1.1880 $1.1916 -0.30% -2.77% +$1.1937 +$1.1874 Dollar/Yen JPY=D3 108.9000 108.9100 -0.02% +5.42% +109.1200 +108.6200 Euro/Yen EURJPY= 129.36 129.76 -0.31% +1.92% +129.9800 +129.3700 Dollar/Swiss CHF=EBS 0.9307 0.9274 +0.36% +5.19% +0.9320 +0.9254 Sterling/Dollar GBP=D3 $1.3841 $1.3932 -0.64% +1.32% +$1.3958 +$1.3830 Dollar/Canadian CAD=D3 1.2533 1.2486 +0.38% -1.57% +1.2547 +1.2463 Aussie/Dollar AUD=D3 $0.7737 $0.7762 -0.31% +0.58% +$0.7772 +$0.7718 Euro/Swiss EURCHF= 1.1055 1.1049 +0.05% +2.29% +1.1069 +1.1041 Euro/Sterling EURGBP= 0.8583 0.8555 +0.33% -3.96% +0.8589 +0.8536 NZ NZD=D3 $0.7154 $0.7168 -0.24% -0.42% +$0.7187 +$0.7143 Dollar/DollarDollar/Norway NOK=D3 8.5760 8.5210 +0.76% -0.01% +8.6100 +8.4825 Euro/Norway EURNOK= 10.1875 10.1300 +0.57% -2.67% +10.2240 +10.1090 Dollar/Sweden SEK= 8.5646 8.5184 +0.28% +4.49% +8.5798 +8.4882 Euro/Sweden EURSEK= 10.1780 10.1496 +0.28% +1.01% +10.1881 +10.1320 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates https://tmsnrt.rs/2RBWI5E^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
