Dollar extends rebound as traders eye U.S. stimulus

The dollar rose from near-three-year lows against its peers on Thursday, boosted by higher U.S. yields as President-elect Joe Biden plans an outline for massive stimulus aid.

The dollar index held onto gains in Asian trading as investors eased on bearish bets. The dollar rose in four of the last five sessions as the prospect of additional stimulus weighed on government bonds.

The dollar index rose 0.1% to 90.431 following a 0.3% gain overnight. It dropped to as low as 89.206 in early January, its lowest level since March 2018.

Analysts say that the dollar’s bounce is only temporary, as more U.S. stimulus will likely boost risk sentiment. 

The euro dipped 0.1% to $1.21405 after falling 0.4% on Wednesday. The dollar was up 0.2% to 104.075 against the Japanese yen.