News: FOREX-Dollar hits one-month high vs yen as Fed rate bets lift U.S. yields

The U.S. dollar reached its strongest level in more than a month against the Japanese yen on Tuesday, lifted by a jump in Treasury yields overnight as traders bet on an early Federal Reserve interest rate hike despite surging COVID-19 cases.

The greenback rose as high as 115.395 yen JPY=EBS for the first time since Nov. 25, as long-term Treasury yields leapt 12.5 basis points overnight to touch 1.6420% for the first time since Nov. 24.

Money markets have fully priced in a first U.S. rate increase by May, and two more by the end of 2022. FEDWATCH

The dollar index =USD , which measures the currency against the yen and five other major peers, held close to the one-week high of 96.328 reached on Monday.

The euro EUR=EBS traded at $1.13065, lifting off the one-week low of $1.12795 from overnight.

"The market is pricing in a more aggressive U.S. rate hike scenario - or at least the risk thereof - in 2022, and that definitely remains the key support for the dollar," said Shinichiro Kadota, senior FX strategist at Barclays in Tokyo.

While the surge in coronavirus cases caused by the Omicron variant continued to impact global travel and public services, and delay the reopening of some U.S. schools after the holidays, investors remained optimistic that lockdowns would be averted.

On Monday, the U.S. Food and Drug Administration authorized the use of a third dose of the Pfizer and BioNTech COVID-19 vaccine for children aged between 12 and 15 years, and narrowed the time for all booster shots to five months from six months after primary doses.

The Australian dollar AUD=D3 hovered close to a near two-week low of $0.7184 reached in the previous session.

Sterling GBP=D3 was about flat at $1.3480 from Monday, when it slipped as low as $1.3431 for the first time since Nov. 29.

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	Currency bid prices at 0039 GMT 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS	$1.1305		$1.1299	 +0.05%		 -0.56%	  +1.1307	 +1.1293 
 Dollar/Yen		JPY=EBS	115.3400	   115.2600	+0.07%		 +0.28%	  +115.3500   +115.3400 
 Euro/Yen		 																			 
 Dollar/Swiss	  CHF=EBS	0.9178		 0.9186	  -0.08%		 +0.63%	  +0.9189	 +0.9177 
 Sterling/Dollar   GBP=D3	 1.3476		 1.3481	  +0.00%		 -0.33%	  +1.3485	 +1.3480 
 Dollar/Canadian   CAD=D3	 1.2751		 1.2746	  +0.04%		 +0.85%	  +1.2755	 +1.2742 
 Aussie/Dollar	 AUD=D3	 0.7194		 0.7191	  +0.05%		 -1.02%	  +0.7198	 +0.7185 
 NZ				NZD=D3	 0.6788		 0.6788	  +0.01%		 -0.83%	  +0.6791	 +0.6785 
 Dollar/Dollar																				   

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

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

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