Dollar, yields fall despite promising U.S. pandemic recovery

The dollar dropped to a near two-week low against its peers on Tuesday, falling along with Treasury yields that dropped from recent highs despite signs of U.S. economic recovery.

Since end-March, the dollar index hovered near its lowest level, falling further in early Asian trade after dropping 0.4% on Monday. 

The Japanese yen recovered from a more than one-year low to 111 against the dollar, briefly falling to 109 on Tuesday.

The euro extended its climb from a near five-month low, close to $1.17 to stand at $1.1821. The risk-sensitive Aussie rose to $0.7657 after rallying 0.8% to start the week. 

The dollar has climbed strongly this year, along with Treasury yields, as traders bet on a speedy U.S. pandemic recovery in comparison to Europe amid massive stimulus and fast vaccinations rollouts. 

The 10-year U.S. Treasury yields slid below 1.7% in early Asian trade, from a peak of 1.776% last week, its strongest level since January 2020.