The dollar index added 0.1%, extending a 0.5% jump from Thursday, the highest in two weeks.
The US 10-year benchmark yield soared to a more than a year high of 1.754% overnight before falling to 1.715%, while Asian stocks followed Wall Street lower.
The Federal Open Market Committee (FOMC) this week pledged to continue aggressive monetary stimulus, saying a short-term spike in inflation would prove temporary amid its projections for the fastest growing US economic growth. strong for almost 40 years.
The next target for the forex market will be the Bank of Japan’s policy decision on Friday, along with the results of a comprehensive policy review.
“After some navel gazes,” bond investors “concluded that the Fed is not (posing) any challenge or discomfort for longer-term UST yields to continue to climb,” writes Rodrigo Catril, senior currency strategist at National Australia Bank, in a customer note.
“The USD has regained its mojo.”
The greenback gained 0.1% to 109.04 yen, adding to small overnight gains.
The yen received some support from a Nikkei report on Thursday that the BOJ should slightly widen an implied band in which it allows long-term interest rates to move around its 0% target.
The euro slipped 0.1% to $ 1.1908, extending Thursday’s 0.5% drop.
As AstraZeneca’s vaccinations are set to restart in Germany, France and other European countries, the region’s growth prospects have been shaken as Paris entered a month-long lockdown.
The British pound fell 0.2% to $ 1.3903 after weakening 0.3% a day earlier, as the Bank of England warned that the outlook for Britain’s recovery remained uncertain, dampening some speculation the bank would signal a more confident outlook.
In the cryptocurrency market, bitcoin weakened to around $ 56,703 in early Asian exchanges, oscillating after briefly surpassing $ 60,000 overnight.
It had hit a new record high of $ 61,781.83 on Saturday, after more than doubling since the start of the year.
“Bitcoin is a dynamic trade and it looks like it could go much further,” said Edward Moya, New York-based senior market analyst at online FX broker OANDA.
“Is it a bubble? Yes. But it can easily reach $ 100,000 before it collapses.”