Dollar on defensive as yields drop from recent highs

The dollar hovered near a six-week low against its peers on Tuesday as the euro rallied amid an upbeat outlook for the region’s vaccination programme.

The dollar had been losing traction as U.S. bond yields dropped below a 14-month high hit last month.

The euro climbed to $1.2038 after hitting a six-week peak of $1.2048 on Monday. The British pound gained 1% overnight, its second-highest daily climb so far in the year. It last traded at $1.3989.

The dollar index plunged to 91.085, following a 2.5% decline from a five-month peak hit last month. Against the yen, the dollar dropped to as low as 107.975, its weakest in over six weeks. It last stood at 108.15.

The Aussie firmed at $0.7769, following a one-month peak of $0.7784 reached on Monday. In offshore trade, the yuan rose to 6.5075 against the dollar.